UK inflation has dropped more than expected, with annualised inflation rate, measured by the consumer prices index (CPI), dipping to 3.9% from 4.6% in October.
This is the lowest rate since September 2021, is below the expectations of analysts, and comes largely thanks to declines in motor fuel prices and recreation costs and a slowdown in food and drink inflation.
Annualised inflation had been forecast to come in at 4.4%.
Meanwhile, core inflation, which takes out volatile factors like energy, food, alcohol and tobacco to give a clear picture of underlying trends, was more stubborn at 5.1% in the 12 months to November 2023, falling from 5.7% in October.
Responding to the news, Martin McTague, national chair of the Federation of Small Businesses (FSB), said: “The decrease in inflation is a whisper of relief to small firms as we end the year. The reduction marks a significant shift from the staggering 10 per cent figure this time last year at the peak of the cost-of-doing-business crisis.
“As inflationary pressures ease, small firms will be wanting the Bank of England to indicate when interest rates may start to fall – this would increase access to finance, drive economic growth and provide a fighting chance at avoiding a recession.
“Businesses will be hoping for a stable environment characterised by more predictable market conditions and lower costs in 2024.”
