UK inflation slows to fresh two-year low at 3.9%: data

LONDON: British inflation has slowed sharply to the lowest level in more than two years on falling petrol prices, official data showed Wednesday, easing a cost-of-living crisis after aggressive interest-rate hikes.

The Consumer Prices Index hit 3.9 percent in November from 4.6 percent the previous month, touching a low last seen in September 2021, the Office of National Statistics said in a statement.

The news handed a further boost to embattled Prime Minister Rishi Sunak after inflation had already achieved his goal of falling below five percent in October.

“Inflation eased again to its lowest annual rate for over two years, but prices remain substantially above what they were before the invasion of Ukraine,” said ONS chief economist Grant Fitzner.

“The biggest driver for this month’s fall was a decrease in fuel prices after an increase at the same time last year.

“Food prices also pulled down inflation, as they rose much more slowly than this time last year.”

November also marked a sharper slowdown than market expectations of 4.3 percent, but the rate is nevertheless almost double the Bank of England’s official target of 2.0 percent.

The news comes one week after the BoE froze its key interest rate at a 15-year peak of 5.25 percent — but warned that it will remain elevated to tackle stubbornly high consumer prices.

Inflation had surged to a 41-year peak at 11.1 percent in October 2022, stoked by spiking energy prices after the invasion of Ukraine by major oil and gas producer Russia and sparking a cost-of-living squeeze in Britain.