Britain's inflation rate eases in November, but recovery concerns persist

LONDON, Dec. 18 (Xinhua) -- Britain's consumer price index (CPI) rose by 3.2 percent year-on-year in November 2025, slower than the 3.6 percent increase recorded in October. While analysts welcomed the easing of stubbornly high inflation, they cautioned that concerns about economic recovery remain.

"Inflation fell notably in November to its lowest annual rate since March," said Grant Fitzner, chief economist at the Office for National Statistics (ONS). He noted that lower food prices, which traditionally rise at this time of year, were the main driver of the decline.

Prices for food and non-alcoholic beverages increased by 4.2 percent year-on-year last month, down from 4.9 percent in October, according to ONS data.

Kris Hamer, director of insight at the British Retail Consortium, attributed the easing of inflation to extensive discounting by retailers during the Black Friday month.

"While high labor and commodity costs have pushed up food inflation throughout 2025, larger promotions ahead of Christmas helped bring this figure down," Hamer said.

With unemployment rising and wage growth slowing, the deceleration of inflation suggests more room for the Bank of England (BoE) to cut interest rates on Thursday, said Stuart Morrison, research manager at the British Chambers of Commerce.

"If the Bank of England acts as expected, it would be a welcome early Christmas present for businesses still under serious cost pressure," he said.

However, analysts warned that the slowdown in CPI growth does not necessarily signal the all-clear for the economy. "The news that inflation is falling faster than expected is mostly welcome, but it may also signal rising recession risks," said Julian Jessop, economics fellow at the Institute of Economic Affairs. He noted that while inflation is easing, prices are still rising from already high levels, albeit at a slower pace.

Britain has faced persistent high inflation in recent months. The country's CPI rose by 3.8 percent year-on-year in September, nearly double the BoE's 2 percent target. The inflation figures for September, August, and July were the highest since January 2024, when the rate was 4 percent. Britain's inflation remains significantly above the BoE's target and that of the euro area, Jessop said.

"The aggressive price discounting in clothing, footwear, and household goods suggests that pre-Budget jitters turned Black Friday into Black November. This trend is not necessarily healthy or sustainable," he said.

While retailers have been striving to offer great value in the run-up to Christmas, government-imposed costs have made this increasingly difficult, Hamer said. He urged the creation of a policy environment that reduces the cost and regulatory burdens on the industry, allowing retailers to invest more in both their prices and customer experience.

Although the Budget did not impose further tax hikes on businesses, Morrison argued that firms' confidence remains low due to the lack of significant growth measures. He warned that the economy will continue to struggle unless business costs are reduced and firms are provided with the right tools to invest, recruit, and trade.