Watch: UK inflation falls from 41-year high
The rate of inflation eased to 10.7% from 11.1% last month, according to official figures: prices are still rising, just not as quickly.
The annual UK CPI index slipped to 10.7% in November, falling back October’s 41-year high of 11.1%, the Office for National Statistics said.
Falling motor fuel prices led the decline in the core consumer prices index (CPI) measure of inflation.
It reflected falling oil costs and a meaningful recovery in the value of the pound versus the dollar on which oil costs are pegged.
Overall, fuel prices rose by 17.2% in the year to November – down from 22.2% in the year to October, the ONS said.
Still, the price of food and non-alcoholic drinks went up by 16.5% in the 12 months to November – up slightly from 16.4% in October. It marks the highest rate seen since 1977.
The biggest factor pushing up costs came from bread, although a slowing in rise in the cost of fruit partially off-set the increase.
Core inflation, which strips out volatile food and energy costs, was 6.3%. The retail prices index, which is used for pricing some public services such as train fares, was 14%.
Prices in restaurants, cafes and pubs made the largest upward contribution to the inflation rate, as the cost of going out jumped.
ONS chief economist Grant Fitzner pointed out that prices are still rising, just not as quickly
“Prices are still rising, but by less than this time last year, with the most notable example of this being motor fuels,” he said.
“Tobacco and clothing prices also rose, but again by less than we saw this time last year.
“This was partially offset by prices in restaurants, cafes and pubs, which went up this year compared to falling a year ago,” he added.
Commenting on today’s inflation figures, ONS Chief Economist Grant Fitzner, said: (1/2)
— Office for National Statistics (ONS) (@ONS) December 14, 2022
Chancellor Jeremy Hunt has warned that making the "wrong choices" on inflation will prolong the pain for UK households.
Inflation is plaguing economies across Europe - it’s the number one enemy that makes everyone poorer. Getting it down is my top priority
We have a plan to help halve inflation next year. But if we make the wrong choices, high prices will persist and prolong the pain for millions
— Jeremy Hunt (@Jeremy_Hunt) December 14, 2022
He said: “The aftershocks of Covid-19 and (Vladimir) Putin’s weaponisation of gas mean high inflation is plaguing economies across Europe, and I know families and businesses are struggling here in the UK.
“Getting inflation down so people’s wages go further is my top priority, which is why we are holding down energy bills this winter through our energy price guarantee scheme and implementing a plan to help halve inflation next year.
“I know it is tough for many right now but it is vital that we take the tough decisions needed to tackle inflation – the number one enemy that makes everyone poorer. If we make the wrong choices now, high prices will persist and prolong the pain for millions.”
The ONS data said prices at the fuel pumps were among the biggest driver of falling inflation, with petrol unchanged between October and November this year, at 163.6p a litre on average, but rising by 7.2p a litre a year earlier.
Diesel price increases also eased, rising by 4p a litre this year to 187.9p, compared with a larger rise of 7.4p a litre a year ago.
Second-hand car prices also helped CPI fall back, with a 5.8% drop in the year to November compared with a 2.7% fall in the year to October.
The ONS added that tobacco prices rose by 0.1% in November, compared with a 4.2% rise a year ago when duty rates increased as announced in the autumn 2021 Budget.
Clothing and footwear saw a 7.5% annual increase on price tags, though this was down from 8.5% in October.
Jack Leslie, senior economist at the Resolution Foundation, a think tank specialising in living standards, said: “Inflation fell at its fastest rate in 16 months in November, driven by falling fuel price inflation and a welcome slowing in food price inflation.
📢 NEW: Our latest #CostofLiving survey results reveal the severe levels of hardship low-income families are enduring this winter. With #inflation at 10.7%, Government interventions haven’t gone nearly far enough to outweigh the woeful inadequacy of our social security system. 🧵 pic.twitter.com/q9OZEOWBif
— Joseph Rowntree Foundation (@jrf_uk) December 14, 2022
“Britain may now be past its inflation peak, which is good news for policymakers at both the Bank and Treasury as they grapple with rising interest rates and public debt.
“But with price rises still massively outstripping pay rises – and Britain’s poorest families facing an inflation rate of over 12% – families are still getting poorer month-on-month and the cost-of-living crisis will continue to deepen in 2023.”
Poorer families suffer more from high inflation because they spend a greater proportion of their income on energy and food, which have seen some of the sharpest price rises.
Watch: How does inflation affect interest rates?