Inflation in the UK slowed more than expected last month, offering some relief to households ahead of the winter holidays. According to the Office for National Statistics (ONS), the Consumer Prices Index (CPI) fell to 3.2% in November 2025, down from 3.6% in October, marking its lowest level since March.
The sharper-than-anticipated drop was largely driven by falling food and clothing costs, including seasonal items that typically rise in price at this time of year. Economists say the data may tip the balance for a long-awaited interest rate cut, as the Bank of England prepares to meet.
Food and Clothing Prices Lead to a Faster Slowdown in Inflation
According to the ONS, food prices were the main contributor to the fall in the annual inflation rate. Notably, items such as cakes, biscuits, and breakfast cereals saw month-on-month price declines, which is unusual in the run-up to Christmas. Overall, food and non-alcoholic drink inflation slowed to 4.2%, down from 4.9% in October.
The price of women’s clothing also fell, contributing to a 0.6% annual decline in the clothing and footwear category. This marked the lowest rate for that group since March 2021. The drop was partially attributed to Black Friday discounts, which had a temporary effect on consumer prices.
There were also reductions in the costs of alcohol and tobacco, with annual inflation for those items falling from 5.9% to 4%, the lowest since December 2022. Meanwhile, transport and furniture costs added to the disinflationary trend, according to the ONS.
Chief economist Grant Fitzner noted that price increase “fell notably in November to its lowest annual rate since March,” driven by declines in both food and clothing prices. He added: “Tobacco prices also helped pull the rate down… after a large rise a year ago.”
Although many prices are still increasing, the rate of change has slowed significantly. For example, prices for pasta, rice, and sugar all fell over the year, while essentials like olive oil recorded a 16.2% drop.
A Shifting Outlook for the Bank of England amid Economic Headwinds
The inflation data arrives just before the Bank of England’s Monetary Policy Committee is due to announce its latest interest rate decision. Markets have now priced in a 98.8% chance of a rate cut, from 4% to 3.75%, according to reporting from The Guardian. This would be the first reduction since 2023.
Economists believe that the drop in core price increases, which excludes food and energy, alongside rising unemployment and slowing wage growth, gives the central bank the cover it needs to act. Services inflation also eased slightly, falling to 4.4%, below the Bank’s expectations.
According to Anna Leach, chief economist at the Institute of Directors, the figures represent “a decisive fall” and strengthen the case for monetary easing. “Food price inflation has eased sharply to its lowest rate since April, despite typically rising at this time of year, while services inflation – a key indicator of domestic price pressure – has also edged down.” she said.
The broader economic picture has deteriorated, with the unemployment rate reaching 5.1%, the highest since 2015, and the economy contracting for two straight months ahead of the autumn budget. Chancellor Rachel Reeves said the inflation drop was welcome news for households, highlighting recent government measures such as energy bill cuts and a freeze on rail fares.
Although inflation remains above the Bank of England’s 2% target, the pace of disinflation appears to be gaining momentum. With evidence mounting of a cooling economy and easing price pressures, policymakers may find fewer reasons to delay action.
