UK Inflation eased more than expected

After hitting a 41-year high in November, the rate of inflation has fallen. In this regard, the current rate suggests that the sharpest decline in living standards may be behind us.

On Wednesday, the Office of National Statistics reported that consumer prices were up 10.7% from a year earlier. However, the figure was below the 11.1% reading for October. Overall, economists had expected the figure to be 10.9%. 

The decline was mainly due to the cost of petrol and used cars. Food and non-alcoholic beverage prices rose 16.4%, the highest since September 1977. Bread and cereals rose the most in this category. Although prices rose 7.2% last year, the cost of fuel remained unchanged in October and November. 

Slowing inflation may have a favourable effect on households. This sector definitely needed help after the sharp increase in energy and food bills. Nevertheless, this barely make a difference to further interest rates. According to the Bank of England's forecast, inflation will remain above the 2% target until 2024 — even as the economy slides into recession.