EconomyDec 14 2022

Inflation slows to 10.7% in November

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Inflation slows to 10.7% in November
Photo by ANDY RAIN/EPA-EFE/Shutterstock
BySally Hickey

The rate of inflation dropped slightly to 10.7 per cent in November, driven by a drop in the price of fuels and second-hand cars.

The consumer prices index dropped from 11.1 per cent in October, however it is still at a 30-year high, according to the Office for National Statistics.

The largest price increases in November were from alcohol in restaurants, cafes and pubs, which were offset slightly by a 5.8 per cent drop in the cost of second-hand cars.

The retail price index rose 14 per cent in November.

Chief economist at the ONS, Grant Fitzner, said: “Although still at historically high levels, annual inflation eased slightly in November. 

“Prices are still rising, but by less than this time last year with the most notable example of this being motor fuels.”

In a statement this morning, the chancellor acknowledged the current public sector pay strikes, which have resulted in much of the UK’s train and postal services coming to a standstill.

As every adviser knows, the road to poor outcomes is often paved with short-term, knee-jerk decisions Jonny Black, Abrdn

Jeremy Hunt said: “The aftershocks of Covid-19 and Putin’s weaponisation of gas mean high inflation is plaguing economies across Europe, and I know families and businesses are struggling here in the UK.

“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.”

The data comes a day before the Bank of England makes its last interest rate decision of the year.

Dan Boardman-Weston, chief executive at BRI Wealth Management, said the bank remains in a “really tricky spot”.

“[The bank] needs to raise rates given that inflation is far in excess of their 2 per cent target, but the economy is in a parlous state. 

“The government and BoE have a difficult balancing act ahead of them and we hope they’re successful in reducing inflation without causing too much economic pain…this looks like a big ask though.”

Jonny Black, strategic director at Abrdn said among all the noise, advisers have the “critical job” of keeping clients focussed on the long-term view.

“As every adviser knows, the road to poor outcomes is often paved with short-term, knee-jerk decisions. 

“This holiday season, maintaining close communication with clients and being ready to answer their questions – on the technical aspects of advice, and their more emotional financial concerns – will be a true gift that keeps on giving.”