UK inflation rate: how fast are prices rising?

Bank also considers other measures, externalSuch as “core inflation” when deciding whether and how to change rates.

Core inflation does not include food or energy prices because they are too volatile, so it may be a better indication of long-term trends. The measure stood at 3.5% in November, down from 3.3% by October last year.

In October, Bank Governor Andrew Bailey said cutting borrowing costs could be “a little more aggressive” if inflation remained under control.

However, after the Budget later that month, the Bank predicted that the policies involved – such as an increase in National Insurance contributions paid by employers – would raise inflation slightly as businesses pass on their increased costs through higher prices. Will pass through.

Announcing the November rate decision, Mr Bailey signaled that further cuts were likely to happen gradually, saying: “We need to ensure that inflation remains close to target, so we will not be able to lower interest rates very quickly.” Or can’t cut too much.”

In December the OECD think tank also predicted that rates would remain high for a longer period of time due to the UK’s budget measures.

The bank is expected to keep rates at 4.75% at its next meeting on Thursday, December 19.