UK Inflation Drops To 3.2%, Boosting Hopes Of Rate Cut.

The UK’s inflation rate dropped sharply to 3.2% in November, increasing the chances that the Bank of England could cut interest rates at its final meeting of the year. Economists had expected inflation to be 3.5%, so the lower number came as a surprise. Inflation was 3.6% in October, making November’s figure the lowest since March.

Core inflation, which excludes food, energy, alcohol, and tobacco, also eased to 3.2%, down from 3.4% the previous month, according to the Office for National Statistics (ONS).

The main reason for the drop was lower food prices, especially items like cakes, biscuits, and breakfast cereals, which usually rise before Christmas. Prices of tobacco and women’s clothing also fell, helping bring inflation down.
However, while factory output costs slowed, the cost of raw materials for businesses continued to rise.

UK Chancellor Rachel Reeves welcomed the fall in inflation but said families still face pressure from the high cost of living and that more work remains. The latest inflation data, along with a rise in UK unemployment to 5.1%, has strengthened expectations that the Bank of England will cut interest rates by 0.25% to 3.75% on Thursday.

Economists believe the decision could be close, with a 5–4 vote expected among policymakers. Governor Andrew Bailey is likely to cast the deciding vote. The UK economy remains weak, growing by just 0.1% in the third quarter, and unemployment appears to be rising.
Experts say the cooling inflation offers relief and suggests price pressures may continue to ease, helped by lower food costs and a slowing job market.