According to the report from the Office for National Statistics (ONS), in November consumer prices rose by 3.9% per year after increasing by 4.6% per year in October. Economists had expected inflation to slow to 4.4% per annum. Although inflation is at its lowest level since September 2021, it remains almost 2 times higher than the Bank of England's target level (2%). The largest downward contribution came from transport (-1.5% per annum vs. +0.5% per annum in October), recreation and culture (+5.3% per annum vs. 6.4% per annum in October), and food and non-alcoholic beverages (+9.2% per annum vs. +10.1% per annum in October).
Meanwhile, core CPI - which excludes energy, food, alcohol and tobacco - rose by 5.1% per annum (the lowest rate since January 2022) after an increase of 5.7% per annum in October. Consensus estimates suggested an increase by 5.6% per annum.
On a monthly basis, the consumer price index fell 0.2% after being unchanged in October. Economists expected an increase of 0.1%.
Against the background of inflation data, the pound fell by 0.55% against the US dollar, as the probability increased that the Bank of England will cut interest rates by the middle of next year.