UK inflation slowed to 3.2 per cent in November, down from 3.6 per cent in October, according to the Office for National Statistics. On a monthly basis, the CPI index fell by 0.2 per cent. The reading remains above the Bank of England’s 2 per cent target but confirms further cooling in price growth.
Essential categories drove the deceleration. Annual food and non‑alcoholic drinks inflation eased to 4.2 per cent from 4.9 per cent, while alcohol and tobacco slowed to 4.0 per cent from 5.9 per cent. Clothing and footwear turned negative at –0.6 per cent year‑on‑year, a move linked by retailers and analysts to widespread Black Friday discounting.
Within the food basket, the ONS highlighted falls in cakes, biscuits and breakfast cereals relative to a year earlier. Olive oil prices are now lower than a year ago-around 16 per cent down-alongside declines in flour, pasta and sugar. By contrast, beef and veal recorded some of the steepest annual rises this autumn at about 27 per cent on the ONS series reported by AHDB, leaving prices elevated into November.
The figures arrive ahead of the Monetary Policy Committee’s decision on Thursday 18 December. Interest‑rate futures now imply a high probability of a 0.25 percentage point cut from the current 4.0 per cent Bank Rate, with softer core and services inflation-3.2 per cent and 4.4 per cent respectively-reinforcing the case. The Bank’s schedule confirms the meeting date.
For households, any cut would pass through first to tracker mortgages and, with a lag, some standard variable rates; pricing on new fixed‑rate deals has already adjusted lower as markets anticipate easier policy. For savers, cash returns typically track Bank Rate and may ease if the MPC cuts.
Because essentials account for a larger share of spending in lower‑income budgets, the slowdown in food inflation offers the clearest relief for households under pressure. Even so, inflation is still above target, and services inflation at 4.4 per cent points to persistent domestically driven costs.
Regulatory change is moving in parallel. On 11 December, the Financial Conduct Authority published near‑final rules for a new ‘targeted support’ regime, allowing authorised firms to provide non‑personalised, needs‑based suggestions to groups of customers on investing and pensions. Subject to enabling legislation, the gateway for permissions opens in March 2026 and the rules are scheduled to commence on 6 April 2026.
Attention now turns to the MPC announcement on Thursday, where any shift in guidance on the inflation outlook and wage dynamics will shape market pricing into 2026. The Committee’s decision and minutes are due on 18 December.