The inflation rate in the United Kingdom (U.K.) dropped to 10.7% in November as fuel prices eased during the month.
Economists polled by the Reuters News Agency had forecast an annual increase in consumer prices of 10.9% in November, after October’s rate rose to a 41-year high of 11.1%.
On a monthly basis, the November inflation rate in the U.K. increased 0.4%, down from 2% in October and below economists’ forecasts of 0.6%.
The U.K. Office for National Statistics said the biggest contributors to inflation in November were electricity, gas, and other fuels, as well as food and non-alcoholic beverages.
Declines in prices at restaurants, cafes and pubs helped to partially offset the November inflation rate in the U.K.
The Bank of England is scheduled to make its next decision on interest rates December 15. Economists almost unanimously expect the central bank to raise interest rates by 50 basis points to help lower the inflation rate further.
Economists say the Bank of England faces a difficult task of trying to lower inflation to its 2% target while not harming an economy that is already extremely weak.
The independent Office for Budget Responsibility projected that the U.K. will suffer its biggest decline in living standards since records began, as real household income is expected to fall by 4.3% in 2022-23.
The British government has announced a sweeping £55 billion ($68 billion U.S.) fiscal plan, including a slew of tax increases and spending cuts aimed at shoring up the country’s finances.
