UK inflation falls more than expected to 3.2% in November

UK inflation falls more than expected to 3.2% in November on x (opens in a new window)UK inflation falls more than expected to 3.2% in November on facebook (opens in a new window)UK inflation falls more than expected to 3.2% in November on linkedin (opens in a new window)UK inflation falls more than expected to 3.2% in November on whatsapp (opens in a new window) Save UK inflation falls more than expected to 3.2% in November on x (opens in a new window)UK inflation falls more than expected to 3.2% in November on facebook (opens in a new window)UK inflation falls more than expected to 3.2% in November on linkedin (opens in a new window)UK inflation falls more than expected to 3.2% in November on whatsapp (opens in a new window) Save Sam Fleming and Ian SmithPublishedDecember 17 2025UpdatedDecember 17 2025Jump to comments sectionPrint this pageStay informed with free updatesSimply sign up to the UK inflation myFT Digest -- delivered directly to your inbox.UK inflation fell more than expected to an eight-month low of 3.2 per cent in November, strengthening the case for the Bank of England to cut interest rates on Thursday to boost a weakening economy.Wednesday’s figure from the Office for National Statistics was below the forecasts of 3.5 per cent from analysts polled by Reuters. It also marked a slowdown from October’s 3.6 per cent.November’s reading was pulled down by weaker food and drink prices, the ONS said.BoE governor Andrew Bailey signalled his support for a further quarter-point rate reduction to 3.75 per cent at this week’s meeting of the Monetary Policy Committee, as long as official data shows an ongoing easing of price pressures. Following the data, traders were near to fully pricing in a reduction in borrowing costs on Thursday and expect another cut by April, according to the swaps market.The pound fell 0.7 per cent to $1.333 against the dollar and the yield on the two-year gilt, which is sensitive to interest rate expectations, dropped 0.06 percentage points to 3.71 per cent in early trading. The MPC has been deeply divided for months over whether to prioritise boosting anaemic economic growth or to bear down on inflation, which peaked at 3.8 per cent over the summer. November’s reading comes a day after official figures showed the UK unemployment rate climbed to 5.1 per cent in the three months to October, in the latest signs of strain in an economy hit by higher taxes. The economy contracted by 0.1 per cent in October. Services inflation, a measure closely tracked by rate setters, eased to 4.4 per cent in November from 4.5 per cent in October. Core inflation, which excludes energy and food, was 3.2 per cent, down from 3.4 per cent in October and below economists’ expectations.Economists said increasing evidence that inflationary pressures were abating opened the door to the possibility of more rate cuts from the MPC next year.Tomasz Wieladek, chief European macro strategist at asset manager T Rowe Price, said the figures were “a clear signal that the cutting cycle is far from done,” adding that it “clearly is a challenge to the more hawkish MPC members”.The central bank predicts that inflation will fall to 2.5 per cent in the final quarter of next year and hit its 2 per cent target in 2027.The MPC has cut interest rates five times since the summer of 2024, but Bailey has signalled that the rate-cutting cycle could tail off next year.

Chancellor Rachel Reeves’ November Budget is set to reduce headline inflation by about 0.4 to 0.5 percentage points as a result of cost of living policies aimed at trimming energy costs, the BoE estimates.Responding to the figures, Reeves said: “I know families across Britain who are worried about bills will welcome this fall in inflation.” Reuse this content (opens in new window) CommentsJump to comments sectionPromoted Content Follow the topics in this article UK economy Add to myFT UK inflation Add to myFT UK Add to myFT Sam Fleming Add to myFT CommentsUK inflation fell more than expected to an eight-month low of 3.2 per cent in November, strengthening the case for the Bank of England to cut interest rates on Thursday to boost a weakening economy.Wednesday’s figure from the Office for National Statistics was below the forecasts of 3.5 per cent from analysts polled by Reuters. It also marked a slowdown from October’s 3.6 per cent.November’s reading was pulled down by weaker food and drink prices, the ONS said.BoE governor Andrew Bailey signalled his support for a further quarter-point rate reduction to 3.75 per cent at this week’s meeting of the Monetary Policy Committee, as long as official data shows an ongoing easing of price pressures. Following the data, traders were near to fully pricing in a reduction in borrowing costs on Thursday and expect another cut by April, according to the swaps market.The pound fell 0.7 per cent to $1.333 against the dollar and the yield on the two-year gilt, which is sensitive to interest rate expectations, dropped 0.06 percentage points to 3.71 per cent in early trading. The MPC has been deeply divided for months over whether to prioritise boosting anaemic economic growth or to bear down on inflation, which peaked at 3.8 per cent over the summer. November’s reading comes a day after official figures showed the UK unemployment rate climbed to 5.1 per cent in the three months to October, in the latest signs of strain in an economy hit by higher taxes. The economy contracted by 0.1 per cent in October. Services inflation, a measure closely tracked by rate setters, eased to 4.4 per cent in November from 4.5 per cent in October. Core inflation, which excludes energy and food, was 3.2 per cent, down from 3.4 per cent in October and below economists’ expectations.Economists said increasing evidence that inflationary pressures were abating opened the door to the possibility of more rate cuts from the MPC next year.Tomasz Wieladek, chief European macro strategist at asset manager T Rowe Price, said the figures were “a clear signal that the cutting cycle is far from done,” adding that it “clearly is a challenge to the more hawkish MPC members”.The central bank predicts that inflation will fall to 2.5 per cent in the final quarter of next year and hit its 2 per cent target in 2027.The MPC has cut interest rates five times since the summer of 2024, but Bailey has signalled that the rate-cutting cycle could tail off next year.

Chancellor Rachel Reeves’ November Budget is set to reduce headline inflation by about 0.4 to 0.5 percentage points as a result of cost of living policies aimed at trimming energy costs, the BoE estimates.Responding to the figures, Reeves said: “I know families across Britain who are worried about bills will welcome this fall in inflation.”