Future Retirement Success
  • Politics
  • Business
  • Investing
  • Stocks
  • Politics
  • Business
  • Investing
  • Stocks

Future Retirement Success

Business

UK inflation rate falls to 3.9%

by December 20, 2023
December 20, 2023
UK inflation rate falls to 3.9%

Inflation has fallen faster than expected to its lowest level in over two years, dragged down by easing petrol and food prices, adding impetus to growing calls for the Bank of England to begin lowering interest rates next year.

Prices rose 3.9 per cent over the year to November, down from an increase of 4.6 per cent in October, according to the Office for National Statistics.

The fall was well below City analysts’ expectations of a decline to 4.3 per cent and means that inflation is now down to its lowest mark since October 2021.

Declining price growth in grocery, transport and leisure and recreational activities were the main factors that drove down the headline rate of inflation. Food inflation dropped to 9.2 per cent from 10.1 per cent, the ONS said.

Grant Fitzner, ONS chief economist, said: “Inflation eased again to its lowest annual rate for over two years, but prices remain substantially above what they were before the invasion of Ukraine.

“The biggest driver for this month’s fall was a decrease in fuel prices after an increase at the same time last year. Food prices also pulled down inflation, as they rose much more slowly than this time last year. There was also a price drop for a range of household goods and the cost of second-hand cars.”

November’s inflation figure was better than the 4.6 per cent expected by the Bank of England, signalling that price pressures have cooled faster than the central bank expected. Analysts expect that trend to continue, which would raise the chances of the Bank of England’s monetary policy committee discussing the possibility of lowering borrowing costs at their meetings early next year.

Last week the MPC elected to keep the UK base rate unchanged for the third meeting in a row at a 15-year high of 5.25 per cent. In the run-up to the meeting, financial markets had priced in a sharp reduction in borrowing costs next year of around one percentage point, sparked by the United States central bank, the Federal Reserve, signalling that it may loosen policy soon.

However, the MPC and Andrew Bailey, the Bank of England governor, pushed back against those bets, stressing that the UK base rate must remain in restrictive territory for an “extended period”.

Three members of the nine-strong MPC voted to increase the base rate by 0.25 percentage points, citing concerns about persistent wage growth and services inflation. Ben Broadbent, a deputy governor at the Bank, said this week that rates may need to stay elevated to curb salary increases.

The ONS said today that services inflation, which the Bank monitors closely, fell to 6.3 per cent, lower than the Bank’s 6.9 per cent projection for November. Core inflation, which removes volatile food and energy prices, eased to 5.1 per cent from 5.7 per cent.

Most analysts expect stagnant growth compounded by receding inflation will force the Bank into a loosening of financial conditions next year. However, robust pay growth and falling inflation would deliver a boost to living standards and spending, lifting economic growth.

Jeremy Hunt, the chancellor, said there was “still further to go” on tackling inflation.

Read more:
UK inflation rate falls to 3.9%

0
FacebookTwitterGoogle +Pinterest
previous post
US imposes new round of sanctions on network involved in Iran’s drone production
next post
Energizing Entrepreneurship: How NJ Ayuk Sees Natural Gas Catalyzing African Industry

You may also like

European gas prices likely to fall sharply this...

September 14, 2022

How To Fund Your Startup

October 12, 2022

Labour eases planning rules to boost solar and...

August 5, 2024

Herbert Hernandez – GIGIL Agency Founder Discusses His...

September 15, 2024

Embrace the Summer: A Season of Reflection and...

August 8, 2023

Retail tycoon Mike Ashley joins the race for...

September 12, 2022

How is each train operator affected by the...

January 31, 2023

Millions of gig workers and people with side...

October 12, 2023

Bernie Ecclestone’s £652M fine – A Lesson for...

October 12, 2023

How Philip Belamant, CEO and Co-Founder of Revolutionary...

September 7, 2022

    Get free access to all of the retirement secrets and income strategies from our experts! or Join The Exclusive Subscription Today And Get the Premium Articles Acess for Free

    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Recent Posts

    • The New Retaliation Tax, Section 899

      June 10, 2025
    • M&S reopens online orders after cyberattack disruption

      June 10, 2025
    • UK payrolls see biggest drop since covid as wage growth slows and job market weakens

      June 10, 2025
    • Why AI and green tech are vital to SME growth in 2025

      June 10, 2025
    • Yes, it’s great to get PR coverage – until it’s locked behind a bloody paywall

      June 10, 2025
    • We have to act now to keep AI from becoming a far-left Trojan Horse

      June 10, 2025

    Categories

    • Business (8,174)
    • Investing (2,022)
    • Politics (15,580)
    • Stocks (3,138)
    • About us
    • Privacy Policy
    • Terms & Conditions

    Disclaimer: futureretirementsuccess.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2025 futureretirementsuccess.com | All Rights Reserved