UK inflation eases slightly to 10.7% ahead of Christmas

Jeremy Hunt says rising costs are still ‘number one enemy’

Inflation has fallen slightly ahead of Christmas to 10.7 per cent.

The new Consumer Price Index (CPI) figure for last month was down from a 41-year high of 11.1 per cent in October.

The Office for National Statistics (ONS) said inflation remained at “historically high levels” despite the drop.

Food prices and energy bills were continuing to drive the overall rise in the cost of living, its figures showed.

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Chancellors said inflation is “the number one enemy” after the latest rate was published.

Inflation eased back by more than expected last month from October’s 41-year high. Economists had expected the CPI rate to fall to 10.9 per cent, rather than the 10.7 per cent announced on Wednesday.

The ONS said the drop largely followed falls in the price of petrol and diesel.

Grant Fitzner, its 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.”

The Office for National Statistics has given its latest assessment on inflation in the UK (Getty Images)

He added: “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.”

Mr Hunt said: “The aftershocks of Covid-19 and Putin’s weaponisation of gas mean high inflation is plaguing economies across Europe and I know families and businesses are struggling here in the UK.

“Getting inflation down so people’s wages go further is my top priority, which is why we are holding down energy bills this winter through our energy price guarantee scheme and implementing a plan to help halve inflation next year.

“I know it is tough for many right now but it is vital that we take the tough decisions needed to tackle inflation - the number one enemy that makes everyone poorer.”

Jeremy Hunt says inflation was the ‘number one enemy’ (Aaron Chown/PA) (PA Wire)

But Rachel Reeves, the shadow chancellor, said: “The question people across Britain will be asking themselves this morning is: ‘Do I and my family feel better off under the Tories? The answer will be no.”

Sarah Olney from the Liberal Democrats said: “Under the Conservative government double-digit inflation has become the grim norm.”

“Every Conservative chancellor in post this year has done nothing to stop sky-high prices hitting struggling families and pensioners.

“Their track record on the cost-of-living crisis has been nothing short of a disgrace, especially as their latest budget hiked taxes on Britain’s hardworking middle.”

The new inflation figures came ahead of the Bank of England’s interest rate decision on Thursday, when it is expected to heap further misery on households with another increase.

Economists expect the rate to increase from 3 per cent to 3.5 per cent, which would be higher than any time since 2008.

UK inflation eased back by more than expected last month but still remains at ‘historically high levels’, according to the Office for National Statistics (Julien Behal/PA) (PA Wire)

Less than one year ago rates were only 0.1 per cent, having sunk to a historic low in response to the lack of activity during the Covid pandemic.

The rapid rise, coupled with inflation, has led to extraordinary stress on some households as mortgage repayments grow more expensive in response to rate hikes.

Bank of England governor Andrew Bailey has said the “economic environment is challenging” but stressed that households are better placed to deal with this than during the 2008 financial crisis.

He said: “We have high inflation, demand is slowing and interest rates have been rising. Household and business finances are under greater strain.

“Overall however, both households and businesses are more financially resilient than they were in previous periods of stress.”

Inflation has also been the driving force of strikes across the economy, as workers, many of who have faced years of real-term wage cuts, demand pay rises to keep up with the surging cost of bills and groceries.

The government argues that giving in to demands for higher wages would keep inflation high.

Additional reporting by Press Association