UK inflation falls to 10.7% as petrol prices drop

The United Kingdom’s inflation rate dropped slightly to 10.7 percent in November, down from the 41-year high of 11.1 percent in October.

Economists had expected the inflation rate to fall to 10.9 percent, rather than the 10.7 per cent announced on Wednesday.

According to the Office for National Statistics (ONS), lower petrol prices helped to ease the rate of price increases in the country.

The agency said the largest upward contributions came from “housing and household services (principally from electricity, gas, and other fuels), and food and non-alcoholic beverages.”

It said the largest downward contributions over the month came from “transport, particularly motor fuels, with rising prices in restaurants, cafes and pubs making the largest, partially offsetting, upward contribution.”

Meanwhile, food and non-alcoholic beverage prices rose by 16.5 percent in the 12 months to November, slightly up from 16.4 percent in October.

Grant Fitzner, ONS chief economist, 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.”

The inflation data came ahead of the monetary policy announcement of the Bank of England (BoE) on December 15.

Last month, the bank raised its interest rate to 3 percent, the eighth consecutive rate increase in the year.

It also said the country was heading into a prolonged recession.