UK inflation cooled again in November. The Office for National Statistics reported CPI at 3.2% year-on-year, down from 3.6% in October and the lowest since March 2025. That confirms the recent turn lower after a late‑summer bump. For households, it means price rises are still happening, just more slowly than a few months ago.

Translating the headline number: a £100 basket of goods and services a year ago would now cost about £103.20. On the month, prices fell by 0.2% compared with a 0.1% rise a year earlier, a sign that discounting and softer input costs are feeding through before Christmas.

The deceleration was led by essentials. Food and non‑alcoholic drinks inflation eased to 4.2% from 4.9% in October. Alcohol and tobacco slowed to 4.0% from 5.9%. Clothing and footwear turned negative year‑on‑year at ‑0.6% after shops brought forward Black Friday deals, offsetting earlier price pressures.

Not everything is getting cheaper. Chocolate remains a notable outlier, with annual increases of roughly 14–17% reported across the autumn as cocoa supply improved only gradually; meanwhile beef and veal have been rising at around 27% year‑on‑year into October. By contrast, olive oil prices have fallen by more than 16% over the year, and flour, pasta and sugar are also softer.

Under the bonnet, core inflation (excluding energy, food, alcohol and tobacco) eased to 3.2%, while services inflation ticked down to 4.4%. Goods inflation has cooled to just above 2%, helped by discounting and a better supply picture. These are the categories the Bank of England watches most closely when judging persistence.

Context helps. UK inflation peaked at 11.1% in October 2022 before retreating. After a mini‑upswing to 3.8% over July–September this year, the latest step down keeps CPI moving nearer the 2% target, albeit not there yet.

Markets now see tomorrow’s Monetary Policy Committee meeting (Thursday 18 December) as the moment the Bank Rate edges down 0.25 percentage points from 4.0% to 3.75%. Pricing implies near‑certainty after the softer inflation print, and sterling has eased on the prospect. The Bank kept rates on hold at 4.0% in November.

What a quarter‑point cut means in the real world: for a £200,000 25‑year repayment mortgage on a tracker fully linked to Bank Rate, a 0.25% fall trims monthly repayments by about £29; on £300,000 the saving is about £43. Lenders move at different speeds and many trackers or SVRs don’t pass through changes in full, but the direction of travel is clear.

Fixed‑rate borrowers won’t see immediate changes; the key for them is what happens to swap rates that drive new fixes. If you’re within six months of your deal ending, it’s worth asking your lender for updated options and checking whether any early‑repayment charges make switching uneconomic ahead of time. As always, keep an eye on fees as well as headline rates.

Savers may find easy‑access rates nudge lower if the Bank cuts. Fixed‑term rates tend to be slower to move, but providers often reprice quickly around policy meetings. One structural positive: from 1 December the FSCS deposit guarantee rose to £120,000 per person, per authorised firm, with temporary high balances protected up to £1.4m for six months. That offers more headroom to spread cash safely.

For those considering investing rather than holding excess cash, regulators are trying to make it simpler to get guidance. The FCA has published near‑final rules for a new ‘targeted support’ regime, allowing firms to give tailored suggestions to groups of customers from April 2026, sitting between generic guidance and full advice. It won’t replace regulated advice, but it should make basic investing decisions less daunting.

Two near‑term watchpoints: first, services inflation and wage growth need to keep easing to sustain disinflation; regular pay growth slowed to 4.6% in the three months to October, still firm but edging down. Second, international comparisons show the UK running hotter than peers like France and Germany, underlining why the Bank is likely to proceed carefully even if it does cut tomorrow.