Inflation falls to 10.7% in November – down from 11.1% October

UK inflation fell to 10.7% in November – down from 11.1% in October – its biggest fall since July 2021.

The Consumer Prices Index (CPI) stands at 10.7% in the 12 months to November 2022, down from 11.1% in October.

The easing in the inflation rate in November 2022 reflected, principally, in falling prices for motor fuels and second-hand cars.

There were also downward effects from tobacco, accommodation services, clothing and footwear, and games, toys and hobbies.

The largest increases for November came from price rises for alcohol in restaurants, cafes and pubs.

The ONS said that fuel prices rose by 17.2% in the year to November 2022, down from 22.2% in the year to October.

“This is principally a base effect with petrol prices unchanged between October and November this year, but rising by 7.2 pence per litre between the same two months of 2021.”

“Diesel prices also contributed to the change in the rate, rising by 4.0 pence per litre this year, compared with a larger rise of 7.4 pence per litre a year ago. Average petrol and diesel prices stood at 163.6 and 187.9 pence per litre in November 2022, compared with 145.8 and 149.6 pence per litre in November 2021.”

Second-hand car prices fell by 5.8% in the year to November 2022, compared with a fall of 2.7% in the year to October.

The annual rate has eased for the eighth consecutive month since March 2022, when it was 31.0%.

Although prices have fallen by just under 6% between March and November this year, much of the change in the annual rate is a base effect as prices rose by over 31% between March and November 2021.

‘During that period, there were reports of increased demand following the coronavirus (COVID-19) pandemic, with a global semiconductor microchip shortage affecting new car production and resulting in some customers switching to the second-hand car market.’ The ONS said.

Food and non-alcoholic beverage prices rose by 16.5% in the 12 months to November 2022, slightly up from 16.4% in October.

The annual rate of inflation for this category has risen for 16 consecutive months, from minus 0.6% in July 2021.

Prices of clothing and footwear rose, overall, by 7.5% in the year to November 2022, down from 8.5% in October.

On a monthly basis, prices rose by 0.1% between October and November 2022, compared with a larger rise of 1.1% between the same two months a year ago.

Chancellor Jeremy Hunt has said:

“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,” he added.

“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.”

Grant Fitzner, Chief Economist at the ONS said:

“Although still at historically high levels, annual inflation eased slightly in November. Prices are still rising, but by less than this time last year with the most notable example of this being motor fuels.”

“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.”

Commenting on today’s inflation figures, which show CPI inflation at 10.7 per cent, TUC General Secretary Frances O’Grady said:

“With inflation still sky-high, the government should be doing everything possible to get pay rising.

“But instead, ministers are holding down pay across the public sector and refusing to negotiate with workers and their unions.

“This government is making a bad situation much worse. To keep families out of hardship and hold back recession, an urgent pay boost is needed.”

Jack Leslie, Senior Economist at the Resolution Foundation, 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. Britain may now be past its inflation peak, which is good news for policy makers 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 per cent – families are still getting poorer month-on-month, and the cost-of-living crisis will continue to deepen in 2023.”