UK inflation rate drops more than expected to 3.9% in November
Pedestrians walk through the festively decorated Burlington Arcade luxury shopping arcade in London, UK, on Monday, Dec. 4, 2023. Inflation in UK shops has fallen to a 17-month low as retailers fight to attract shoppers ahead of the crucial holiday period. Photographer: Jason Alden/Bloomberg via Getty Images
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LONDON — U.K. inflation fell by more than expected in to hit 3.9% in November, in the lowest annual reading since September 2021.
Economists polled by Reuters had expected a modest decline in the headline consumer price index to 4.4%, after the 4.6% annual reading of October surprised to the downside by dropping to a two-year low.
Month-on-month, headline CPI fell by 0.2%, compared to a consensus forecast of a 0.1% increase.
Core CPI — which excludes volatile food, energy, alcohol and tobacco prices — came in at an annual 5.1%, well below a 5.6% forecast.
The Office for National Statistics said the largest downward contributions came from transport, recreation and culture, and food and non-alcoholic beverages.
The Bank of England last week maintained a hawkish tone as it kept its main interest rate unchanged at 5.25%. The Monetary Policy Committee reiterated that policy is “likely to need to be restrictive for an extended period of time.”
The central bank ended a run of 14 straight interest rate hikes in September, as policymakers looked to wrestle inflation back down towards the Bank’s 2% target from a 41-year high of 11.1% in October 2022.
