Inflation Rate Decrease November 2023
The Office for National Statistics (ONS) reported yesterday a significant drop in inflation to 3.9% for November. As a result, the City foresees a substantial reduction in interest rates during 2024.
The Bank of England's assertion that it is premature to consider lowering borrowing costs at this stage.
The ONS attributed the decline in the annual inflation rate to a 0.2% drop in prices in November, in contrast to a 0.4% increase in the same month the previous year. Cheaper fuel primarily contributed to the November rate dipping below 4%, with the average petrol price decreasing by four pence per litre on a monthly basis.
The ONS highlighted a slower rise in food prices compared to a year ago, specifically noting decreases in the prices of bread and cakes compared to the previous month. However, overall, food prices increased by 0.3% month on month and retained an annual increase of 9.2%, slightly lower than the 10.1% rate in October.
Additionally, the ONS underscored that the cost of food and non-alcoholic beverages had risen by approximately 27% in the past two years, a notable contrast to the 9% increase observed between November 2011 and November 2021.
The ONS reported:
The Consumer Prices Index including owner occupiers' housing costs (CPIH) rose by 4.2% in the 12 months to November 2023, down from 4.7% in October.Â
On a monthly basis, CPIH fell by 0.1% in November 2023, compared with a rise of 0.4% in November 2022.Â
The Consumer Prices Index (CPI) rose by 3.9% in the 12 months to November 2023, down from 4.6% in October.Â
On a monthly basis, CPI fell by 0.2% in November 2023, compared with a rise of 0.4% in November 2022.Â
The largest downward contributions to the monthly change in both CPIH and CPI annual rates came from transport, recreation and culture, and food and non-alcoholic beverages. Â
Core CPIH (excluding energy, food, alcohol and tobacco) rose by 5.2% in the 12 months to November 2023, down from 5.6% in October; the CPIH goods annual rate slowed from 2.9% to 2.0%, while the CPIH services annual rate eased from 6.2% to 6.0%.Â
Core CPI (excluding energy, food, alcohol and tobacco) rose by 5.1% in the 12 months to November 2023, down from 5.7% in October; the CPI goods annual rate slowed from 2.9% to 2.0%, while the CPI services annual rate eased from 6.6% to 6.3%.
Source: ONS
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