UK inflation rate falls to 3.9% in November

Economists had predicted it could fall to 4.3 per cent from 4.6 per cent in October

A shopper browses a pawnbroker's goods in Bexleyheath, London. Bloomberg

Inflation in the UK fell to 3.9 per cent in November, representing a bigger dip than predicted and the lowest figure in two years.

The rate fell from 4.6 per cent in October, the Office for National Statistics (ONS) said on Wednesday.

Economists had expected the fall to be about 4.3 per cent, but dropping petrol and food prices helped drive a bigger-than-expected decrease.

This is the first time food price inflation – one of the biggest drivers of Britain’s cost-of-living crisis – has been in single digits since June 2022.

"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," said Grant Fitzner, chief economist at the ONS.

"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 rose much more slowly than this time last year.

"There was also a price drop for a range of household goods and the cost of second-hand cars."

The government had set a target of halving inflation in 2023, although the current rate is still well above the Bank of England's 2 per cent goal.

Chancellor Jeremy Hunt said: "With inflation more than halved we are starting to remove inflationary pressures from the economy.

"Alongside the business tax cuts announced in the autumn statement this means we are back on the path to healthy, sustainable growth.

"But many families are still struggling with high prices so we will continue to prioritise measures that help with cost-of-living pressures."