The UK’s inflation rate eased to 3.2% in November, down from the 3.6% recorded in October, according to the latest data from the Office for National Statistics (ONS). However, the rate remains well above the Bank of England’s 2% target, posing ongoing challenges for policymakers and consumers alike.
The Consumer Prices Index (CPI), the main measure of inflation, has been closely monitored by the Bank of England as it seeks to balance the need to tame rising prices with the risk of harming the broader economy. The Bank has implemented a series of interest rate hikes, bringing the rate to a 16-year high of 5.25% in recent months.
The Bank’s rate-setting decisions have been a delicate balancing act. While higher interest rates can help cool demand and slow price rises, they also increase the cost of borrowing for both households and businesses. This can lead to higher mortgage payments, reduced investment, and softer job market conditions.
“Inflation soared in 2022 due to a combination of factors, including increased demand for oil and gas after the Covid-19 pandemic, as well as the impact of Russia’s invasion of Ukraine on energy prices,” explained Marcus Williams, a financial expert at The Update Desk. “While the rate has come down significantly from the 11.1% peak reached in October 2022, it remains stubbornly high, largely driven by continued pressures on food prices.”
Indeed, food price inflation rose to 4.9% in the year to October 2025, before easing slightly to 4.2% in the year to November. This was cited by the ONS as the most significant contributor to the overall inflation rate during the period.
The Bank of England has recently opted to cut interest rates, despite the high inflation, in an effort to encourage consumer spending and business investment to boost the economy. However, this decision was a close one, with policymakers voting 5-4 in favour of the cut.
Looking ahead, the Bank has indicated that interest rates are “likely to continue on a gradual downward path” in 2026, but warned that future decisions on rate changes will be even more closely watched.
“The challenge for the Bank of England is to find the right balance between controlling inflation and supporting the broader economy,” said Williams. “With the UK facing a mixed economic picture, including concerns over rising unemployment and weak growth, the path ahead is far from straightforward.”
