UK inflation fell back slightly in November 2022 according to figures released today by the Office for National Statistics (ONS).
Consumer Prices Index (CPI)
UK Consumer Prices Index (CPI) remained double digit and fell by 0.4% from 11.1% pa (October 2022) to 10.7% pa (November 2022). Make not mistake, this was no huge fall and means prices are merely back to where they were in Mid-October and still 0.6% pa higher than in September.
The ONS put the continued high inflationary rises down to continuing higher of our gas and electricity as well as an increase in the costs for alcohol in restaurants, cafes, and pubs.
The downside trend was fuelled by a fall in the costs of transport, particularly for motor fuels and second-hand cars. In addition, whilst costs remain high, tobacco, accommodation services, clothing and footwear, and games, toys and hobbies fell back.
Old Inflation Measure - Retail Prices Index (RPI)
The old measure of inflation RPI, an arithmetical mean of the average prices of a basket of household spending, remained at or near 41-year highs but fell slightly from 14.2% pa (October 2022) to 14.0% so no real progress and not even anywhere near 12.6% pa in September 2022.
As mentioned last month, some commentators were predicting this could hit 18% pa, taking us back to the crisis of the late 1970s but we forecast another significant interest rate increase of 0.5% from the Bank of England tomorrow to try and steer CPI back to its trend growth target of 2.0% pa.
No doubt UK stock markets will fall back today given stubborn inflation and the reality of higher interest rates tomorrow.
Whilst many commentators will bemoan interest rates increasing, do not forget this is to encourage us all to save rather than spend as well as making the £ stronger against the $ and € meaning the costs of gas and oil (priced in $) will be cheaper as well as all other imports to UK including food and wine being cheaper. The silver lining may be that many of us are starting to see interest being paid on our savings.