Massive relief for Rachel Reeves as UK inflation drops to 3.2%

Economists had expected inflation to ease (Image: Getty)

The rate of inflation has dropped to 3.2%, easing pressure on prices in a move which would come as a relief to Rachel Reeves. Economists had expected inflation to ease in November after a dip in food costs helped offset a jump in hotel prices.

The Consumer Prices Index (CPI) was 3.2% in the 12 months to November, down from 3.6% in October, according to the Office for National Statistics. ONS Chief Economist Grant Fitzner said: "Inflation fell notably in November to its lowest annual rate since March. Lower food prices, which traditionally rise at this time of the year, were the main driver of the fall with decreases seen particularly for cakes, biscuits and breakfast cereals."

Mr Fitzner added tobacco prices also helped pull the rate down as prices eased slightly after a large rise a year ago. He added: "The fall in the price of women's clothing was another downward driver.

"The increase in the cost of goods leaving factories slowed, driven by lower food inflation, while the annual cost of raw materials for businesses continued to rise."

Mike Randall, Chief Executive at Simply Asset Finance, said lower inflation offered a small seasonal boost for the Chancellor, gently stoked the coals of optimism for businesses and helped move the economy in a more intentional direction.

He added: "But lower inflation alone won’t sustain this trajectory. With the Budget now in the rear-view mirror, one of the Government’s New Year’s resolutions must be a more intentional approach to supporting businesses with access to finance and long-term investment."

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