Financial News: UK Inflation Eases To 3.2%

UK Inflation Eases To 3.2%

12/17/2025 - 08:09:00 (RTTNews)

(RTTNews) - UK inflation slowed more than expected in November, strengthening the call for an interest rate reduction this week, official data revealed on Wednesday.

The consumer price index rose 3.2 percent year-on-year, slower than the 3.6 percent increase in October, the Office for National Statistics said. Inflation was forecast to ease marginally to 3.5 percent.

On a monthly basis, the CPI dropped 0.2 percent, in contrast to the 0.4 percent rise posted in October. Prices were expected to remain flat in November.

Core inflation that excludes prices of energy, food, alcohol and tobacco, softened to 3.2 percent from 3.4 percent in the previous month.

The annual increase in the CPI goods fell to 2.1 percent from 2.6 percent. Meanwhile, services inflation slowed only slightly to 4.4 percent from 4.5 percent.

The Bank of England is set to announce its monetary policy decision on December 18. Markets widely anticipate a quarter-point reduction.

At the November rate-setting meeting, the BoE had maintained the bank rate at 4.00, which was the lowest since early 2023.The bank had reduced the rate five times since August 2024.

Today's data indicates that price pressures are cooling, ING economist James Smith said. The economist expects headline inflation to fall pretty close to 2 percent by May.

Taken together with the rapid slowdown in wage growth, it will become increasingly clear that the UK is becoming less of an outlier on inflation, Smith added. The economist expects two further cuts in February and April 2026 after a reduction this week.

Another report from the ONS showed that input price inflation accelerated in November while output price growth softened.

Input prices rose 1.1 percent year-on-year in November, up from a revised rise of 0.8 percent in October. At the same time, output price growth slowed to 3.4 percent from 3.6 percent.

On a monthly basis, input prices logged an increase of 0.3 percent after remaining flat. At the same time, output prices posted a steady rise of 0.1 percent.

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