Inflation rate eases off slightly but prices still soaring

The rate of inflation has fallen slightly in a rare bit of cost of living good news.

Figures released today show the Consumer Prices Index inflation dropped to 10.7% in November from 11.1% in October.

The Office for National Statistics confirms prices are still rising steeply but the notable drop will come as welcome news to families and the government.

Upward pressure on households is mainly being fuelled by the price of energy and good, the research confirms.

Prices in restaurants, cafes and pubs have also continued to climb as companies face higher wholesale costs.

But there was good news on transport, particularly motor fuels, where prices have come down.

The fall is more pronounced that analysts had expected, dropping by four percentage points in stead of two.

While prices are still rising at near-record levels, it’s a welcome downwards move after the rate hits its highest rate since October 1981 in the last set of figures.

The Bank of England is expected to increase interest from 3% to 3.5% in an effort to dampen inflation when it’s leading committee meets on Thursday, a move which will hit mortgage holders.

Grant Fitzner, ONS chief economist, said: ‘Although still at historically high levels, annual inflation eased slightly in November.

‘Prices are still rising, but by less than this time last year, with the most notable example of this being motor fuels.

‘Tobacco and clothing prices also rose, but again by less than we saw this time last year.

‘This was partially offset by prices in restaurants, cafes and pubs, which went up this year compared to falling a year ago.’

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