Report Summary

Period covered: November 2025

3 minute read

Note: This report summary is one or two months behind the current month as standard reporting practice. The content is indicative only and incomplete with certain data undisclosed. Subscribe to access this data or take out a free 30-day subscription trial now.

Inflation

Headline CPI eased to xx%, down from xx%, with prices falling on the month. The move lower was driven by goods, food and housing, and confirms that price pressures are loosening beneath the surface.

Goods inflation slowed sharply to xx%, while services inflation edged down to xx%, extending a gradual retreat since the summer. Progress remains slow, but the direction is consistent, helped by slower rent growth and easing labour cost pressures.

Food inflation delivered the clearest surprise, with the annual rate falling back to xx% following October's rebound. Bread, cereals, dairy and confectionery all moved lower, supported by heavier discounting late in the period.

Alcohol and tobacco inflation slowed to xx%, the lowest since 2022, as last year's duty-driven distortions dropped out of the comparison.

Clothing prices also fell sharply, with annual inflation at xx%, driven by deeper and broader discounting around Black Friday than a year earlier. Women's clothing was the main driver.

Costs backdrop: Producer input inflation rose to xx% in November, while output inflation eased to xx%, as supply chain pressures remain muted.

Commodity benchmarks eased during the month, with oil prices staying anchored in the low USD 60s, restraining transport and distribution costs. Shipping rates remain elevated but stable, adding friction rather than fresh pressure.

Financial market reaction: Following November's release, investors have now priced in a December rate cut with a xx% probability, with expectations for further easing extending into the first quarter of 2026. Gilt yields moved lower and sterling softened, reflecting growing confidence that restrictive policy is nearing its end.

Inflation outlook: November's figures support the view that inflation has peaked. Disinflation is no longer being carried by one or two volatile categories. Food, alcohol, clothing, household goods and housing costs are all pulling in the same direction, indicating that easing price pressure is now embedded in pricing behaviour.

Earlier concerns that food price pressure could entrench expectations now look overstated, particularly with price falls evident at the till and producer trends pointing lower.

Near term, headline inflation may wobble around seasonal effects into December, but that sits against a backdrop of easing pressure. Holding interest rates steady now carries a higher cost than it did a month ago, particularly as household finances stabilise and demand remains fragile.

Households will welcome more stable pricing, with fewer swings and shocks at the checkout, improving household budgets. Whether that stability feeds through to a stronger Christmas for retailers is less certain, with spending still likely to remain considered.

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The headline Consumer Price Index (CPI) rose by 3.2% YoY in November, down from 3.6% in the previous month.