Official figures show the Consumer Prices Index (CPI) rose by 10.7% in the year to November, down from 11.1% last month. This was despite the rate of inflation accelerating in the food and hospitality sectors heading into the all-important Christmas trading period.
The Office for National Statistics (ONS) stated that falling motor fuel prices led to the decline in overall inflation as global oil costs eased.
The largest upwards contribution to the inflation number in November came from rising prices in restaurants, hotels, cafes and pubs – led by alcoholic drinks. The ONS noted that the annual rate of inflation in this part of the hospitality sector was running at its highest level since 1991, at 10.2%.
Meanwhile, food and non-alcoholic beverage prices rose by 16.5% year-on-year, slightly up from 16.4% in October, and a 45-year high for the sector. The annual rate of inflation for this category has risen for 16 consecutive months, from minus 0.6% in July 2021.
Some analysts stated that the dip in the overall rate of inflation should be the start of a few months of falls, with October’s four-decade high now looking to have been the peak. However, inflation is still likely to remain very high for months to come, with the Bank of England widely expected to raise interest rates tomorrow as part of its battle to bring the figure down significantly next year.
Paul Dales of Capital Economics and Samuel Tombs of Pantheon Macroeconomics said that November’s figure showed that inflation in the UK had peaked and price rises would continue to slow.
However, Grant Fitzner, chief economist of the ONS, told the BBC’s Today said he believed it was “too early” to tell.
“We’ve only one fall from a 40-year high so let’s wait a few months and see how it goes,” he said.
NAM Implications:
- Given that cash-strapped shoppers are driven by perception.
- (despite politicians’ reassurances…)
- Pragmatic suppliers and retailers will anticipate the negative effect of soaring inflation on their sales for 2023, at least…
- …unless you know something we don’t?
