Today’s data showing the CPI rate grew at 3.9% in November, a greater slowdown than expected, is welcome confirmation that the headline rate of inflation is continuing to ease. However, prices are still rising from a very high base, following multiple economic shocks and core CPI remains stubborn at 5.1%.

“Supply chain issues during the pandemic and the energy price shock from last year, continue to work their way through the system. Our most recent forecast expects the CPI rate to be higher than the Bank’s 2% target until the end of 2025.

“While producer prices continue to fall, with –2.6% growth this month, global conflicts such as the war in Gaza could lead to further supply chain breakdowns and higher fuel prices in the short term.

“Persistent inflation and high interest rates are likely to remain a barrier to business growth for some time to come. Coupled with trade barriers with the EU and ongoing worker shortages, it’s not clear how large-scale growth will be unlocked. Businesses are desperate for a clear, long-term plan for growth which sets out a vision for infrastructure, skills, and green innovation.”