20 December: Inflation At 3.9% May Accelerate Bank Rate Cut
The annual rate of inflation plunged more than expected to 3.9% in November this year according to official figures, offering hope that interest rates could start to come down sooner than expected in 2024, writes Andrew Michael.
Today’s Consumer Prices Index (CPI), from the Office for National Statistics (ONS), fell more abruptly than economists’ predictions of 4.3%. and stands at its lowest level for more than two years.
The ONS added that, on a monthly basis, CPI rose by 0.2% month-on-month to November, compared with a rise of 0.4% 12 months ago.
Core CPI, which leaves out volatile data covering energy and food, rose by 5.1% in the year to this November, down from 5.7% a month earlier.
CPI including owner occupiers’ costs (CPIH) rose by 0.1% in the year to November 2023, down from a 0.4% rise recorded 12 months earlier.
The ONS said that the largest downward contributions to the change in both the CPI and CPIH annual rates came from transport, recreation and culture, and food and non-alcoholic drinks.
Grant Fitzner, ONS chief economist, said: “Inflation eased again to its lowest annual rate for over two years, but prices remain substantially above what they were before the invasion of Ukraine.
“The biggest driver for this month’s fall was a decrease in fuel prices after an increase at the same time last year. Food prices also pulled down inflation, as they…
