In a significant economic development, the rate of price increases across the United Kingdom slowed more sharply than anticipated in November, offering some relief to households. The primary driver behind this welcome deceleration was a notable drop in the cost of everyday food items.
Inflation Cools Faster Than Forecast
According to the latest data released by the Office for National Statistics (ONS), the Consumer Prices Index (CPI) measure of inflation fell to an annual rate of 3.2% in November 2025. This represents a marked decrease from the 3.6% rate recorded in October and is the lowest level seen since March.
The core inflation rate, which excludes often volatile components like food and energy to provide a clearer view of underlying price pressures, also declined. It dropped to 3.2% from 3.4% the previous month.
Food Prices Lead the Decline
Grant Fitzner, the chief economist at the ONS, highlighted the role of grocery costs in the latest figures. "Inflation fell notably in November to its lowest annual rate since March," he stated. "Lower food prices, which traditionally rise at this time of the year, were the main driver of the fall with decreases seen particularly for cakes, biscuits, and breakfast cereals."
This unexpected dip in food price inflation provided a crucial counterbalance to other persistent cost pressures, resulting in the broader-than-forecast slowdown.
Government Backs Grangemouth Plant with £120m
In a separate major business announcement, the UK government has confirmed a substantial investment to safeguard a critical piece of national industrial infrastructure. Ineos, the chemicals giant founded by Sir Jim Ratcliffe, has been awarded £120 million in government funding.
This financial support is designed to secure the future of the UK's last remaining ethylene plant, located at Grangemouth in Scotland. The deal is anticipated to protect more than 500 skilled jobs directly associated with the facility.
Officials emphasised the strategic importance of the plant, noting that the ethylene it produces is essential for several key industries. Its outputs are vital for manufacturing medical-grade plastics, systems for water treatment, and components used in aerospace and automotive manufacturing.
Economic Implications and Outlook
The twin announcements present a mixed but cautiously optimistic picture for the UK economy. The sharper fall in inflation will be closely scrutinised by the Bank of England as it deliberates on future interest rate decisions. For consumers, any easing in the cost of living, particularly for essential items like food, is a positive signal.
Concurrently, the significant state investment in the Grangemouth facility underscores a commitment to preserving the UK's industrial base and high-value manufacturing capabilities. It highlights the ongoing interplay between government policy and private sector operations in maintaining economic resilience.
Market attention will now turn to upcoming data releases, including the German Ifo business climate index and UK house price figures, for further clues on the broader economic trajectory.
