UK inflation drops but cost of living remains high

Price rises slowed last month but the cost of living remains close to its highest level for 40 years.

UK inflation, the measure of the rate of price rises, fell to 10.7% in the year to November from 11.1% in October.

The drop was due to petrol prices falling from record highs, but was offset by price rises for alcohol in restaurants, cafes and pubs.

Some analysts said November’s lower figure showed that inflation has peaked and price increases will slow down.

Inflation is a measure of the cost of living and to calculate it, the Office for National Statistics (ONS) keeps track of the prices of hundreds of everyday items, known as a “basket of goods”.

Lower inflation does not mean the prices of goods will go down, it just means they stop rising as quickly.

The main driver behind the easing in the inflation rate between October and November came from the fall in price for petrol and diesel.

However, the ONS said average fuel prices were still way above what they were last year. In November, petrol and diesel prices stood at 163.6p and 187.9p per litre respectively, compared with 145.8p and 149.6p per litre in November 2021.

Meanwhile food prices continued to rise, with annual food inflation hitting 16.5% – the highest rate for 45 years – up from 16.4% in October.

Chancellor Jeremy Hunt said the “aftershocks” of the pandemic and Vladimir Putin’s “weaponisation of gas” meant high inflation was “plaguing economies across Europe”.

“Getting inflation down so people’s wages go further is my top priority, which is why are holding down energy bills this winter through our Energy Price Guarantee Scheme and implementing a plan to help halve inflation next year,” he said.

“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.”