UK inflation in unexpectedly steep fall to 3.9% on back of lower petrol prices

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Britain's two-year cost of living crisis showed further signs of easing in November as the annual inflation rate dipped far more sharply than expected to 3.9% — its lowest in more than two years.

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20 Dec 2023

The Office for National Statistics (ONS) said inflation as measured by the consumer prices index had dropped sharply for a second month from 4.6% in the year to October – continuing the recent downward trend.

Cheaper fuel was the main reason for the dip in inflation below 4% last month but the ONS said food prices were also rising more slowly than a year ago. The decline does not mean that prices are going down, only that they are rising more slowly.

Although the figure remains at almost double the government’s 2% target, the latest fall means Rishi Sunak can say he has met his target of halving inflation in the course of 2023.

City forecasters had not expected a repeat of October’s sharp drop in inflation from 6.7%, and had pencilled in a decline to 4.4% in November. Core inflation – which strips out fuel, food, alcohol and tobacco – also fell