UK inflation slowed more than expected: British consumers can benefit from lower food and clothing prices

The UK witnessed one of its lowest inflation levels in the past eight months, with inflation falling to 3.2% in November, surprising economists who had not expected such a sharp decline.

As The Guardian reported, food prices also slowed, particularly for cereals, cakes, and biscuits—an unusual trend for this time of year. In addition, prices for women’s clothing declined as well. As a result, British consumers may be able to enjoy the Christmas shopping season a little more this year.

The pound dropped as much as 0.7% in response to the latest inflation figures, as traders increasingly priced in the possibility of two interest-rate cuts by the end of April.

With Governor Andrew Bailey expected to side with dovish policymakers, economists now believe the numbers almost guarantee that the Bank of England will lower rates at its meeting on Thursday.

The data also point to signs of an economic slowdown: the economy contracted in October for the second consecutive month, private-sector pay growth fell below 4% for the first time since 2020, and unemployment rose to 5.1%, the highest level in nearly five years.

Benedetta Zimone