THE Consumer Prices Index (CPI) rose by 3.2% in the 12 months to November 2025, down from 3.6% in the 12 months to October, the Office for National Statistics revealed this morning.
Experts said a rate cut is now nailed on tomorrow, with one suggesting a 0.5% ‘mega-cut” could be on the cards.
Another said Labour should not take credit for this, while a third said inflation falling isn’t a win for the Bank of England’s “dusty economic playbook” but shows the British public is “exhausted”.
On a monthly basis, CPI fell by 0.2% in November 2025, compared with a rise of 0.1% in November 2024.
Food and non-alcoholic beverages, and alcohol and tobacco made the largest downward contributions to the monthly change in both CPIH and CPI annual rates.
Meanwhile, Core CPI (CPI excluding energy, food, alcohol and tobacco) rose by 3.2% in the 12 months to November 2025, down from 3.4% in the 12 months to October; the CPI goods annual rate slowed from 2.6% to 2.1%, while the CPI services annual rate eased slightly from 4.5% to 4.4%.
Core CPIH (CPIH including owner occupier housing costs but excluding energy, food, alcohol and tobacco) rose by 3.5% in the 12 months to November 2025, down from 3.7% in the 12 months to October; the CPIH goods annual rate slowed from 2.6% to 2.1%, while the CPIH services annual rate eased slightly from 4.6% to 4.5%.
Grant Fitzner Chief Economist, ONS, 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.
“Tobacco prices also helped pull the rate down, with prices easing slightly this month after a large rise a year ago. 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.”
Inflation “relief”
Tony Redondo, Founder at Newquay-based Cosmos Currency Exchange, welcomed the news: “After Friday’s dreadful GDP data and this week’s grim unemployment figures, finally some relief for consumers, borrowers and businesses with a second consecutive monthly fall in the UK CPI inflation rate. This all but nails on a 0.25% interest rate cut by the Bank of England tomorrow.
“No doubt the Chancellor will be taking to the airwaves to explain how, despite her dreadful inheritance, she is turning the UK economy around, and there are better times ahead for the UK.
“Mortgage rates have been falling in the last few weeks anyway, but for businesses, a worrisome lack of confidence will mean that investment and spending will largely stay on a tight leash for most.”
Omer Mehmet, Managing Director at Welling-based Trinity Finance, said: “Inflation has edged down quite sharply and the base rate looks set to follow it tomorrow. But let’s not kid ourselves that all is well in the economy, because unemployment continues to rise and business sentiment has been hit hard.
“However, a rate cut this week and more cuts next year will help absorb some of the pressure weighing down on households.”
Popping the corks
Darryl Dhoffer, Founder at Bedford-based The Mortgage Geezer, commented: “Ministers will be popping champagne in Whitehall this morning because the inflation rate finally ticked down. How dare they? Let’s be crystal clear: a decrease in the rate of inflation is not a decrease in prices. It just means we are getting poorer slightly slower than we were yesterday.
“This government will likely demand a victory lap for “taming” a crisis they engineered. They point to a decimal point on a spreadsheet. We on the other hand point to empty fridges and stagnant wages.
“Celebrating this “drop” is like an arsonist asking for a medal because the house is burning down slightly less fiercely than it was an hour ago.”
Rohit Kohli, Director at Romsey-based The Mortgage Stop, a broker, believes inflation is not beaten: “CPI has eased, but it is still well above the Bank of England’s 2% target. I expect a 0.25% cut on Thursday because the economy is weak and needs support.
“That does not mean inflation is beaten. Government policy has created a cost ratchet for firms, and the next turns are already set. Energy bills rise in January as the price cap changes. Business rates increase across many sectors. Employer National Insurance remains a drag.
“None of this points to falling input costs. So while mortgage rates have been edging down, that may not last. A small move in swaps and lenders will reprice. Borrowers should secure deals promptly and be ready for further volatility.”
Not all will benefit
Patricia McGirr, Founder at Burnley-based Repossession Rescue Network, said: “Lower inflation is not relief. It is evidence that households have hit the wall. Prices ease when people stop spending, not when life gets easier.
“Higher rates have forced many to cut back hard, drain savings and delay decisions, and that pressure shows up in the data before it shows up in arrears.
“Lower rates are good news for borrowers with strong credit and access to competitive deals. For savers, returns start to thin. For those with imperfect credit, the system barely shifts at all. They stay stuck on punitive rates.”
Samuel Mather-Holgate, Managing Director at Swindon-based Mather and Murray Financial, a wealth manager, said: “Reeves will take credit for a mega-cut in interest rates if Bailey decides to chop them by 0.5% on Thursday, which cannot now be ruled out.
“That should shock the economy into life for the post festive period, as retailers try and claw back some lost profitability over a bad Christmas.”
Rob Mansfield, Independent Financial Advisor at Tonbridge-based Rootes Wealth Management commented: “Inflation was expected to ease and it’s good news that it has but there is more to be done to get back down to the target of 2%.
“This adds some justification for the Bank of England to cut the base rate on Thursday but they may take the safe path, hold and look for more progress on inflation coming down. With growth stuttering, inflation is still robbing money of its value.”
Dusty economic playbook
Rohit Parmar-Mistry, Founder at Burton-on-Trent-based Pattrn Data, said a cut cannot be guaranteed: “This isn’t a victory for the Bank of England’s dusty economic playbook, it’s because the British public is exhausted.
“We’ve crushed demand by hammering disposable income so hard that price growth had nowhere left to go. If the Bank of England has any sense, this greenlights an immediate base rate cut.
“But policymakers’ rigid obsession with the 2% target means they’ll likely hesitate. They are fighting a war that is already over. Holding rates now isn’t ‘cautious’; it’s economically negligent.
“For mortgage holders, remember: lenders hike rates like a rocket but drop them like a feather. Don’t expect instant relief. For my business, lower inflation means clients can stop firefighting costs and start planning.”
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