Inflation dips but food prices experience fastest hike ‘since 1977’ and energy bills soar | Personal Finance | Finance

The drop in the Consumer Prices Index (CPI) figure was slightly bigger than expected by most City analysts, who forecast the annual rate of price rises would slide to 10.9 percent last month, from 11.1 percent in October.

The largest downward contribution to the change in CPI annual inflation rates between October and November 2022 came from transport, particularly motor fuels, with rising prices in restaurants, cafes and pubs making the largest, partially offsetting, upward contribution.

Overall, fuel prices rose by 17.2 percent in the year to November – down from 22.2 percent in the year to October, the Office for National Statistics said.

However the price of food and non-alcoholic drinks went up by 16.5 percent in the 12 months to November – up slightly from 16.4 percent in October. Danni Hewson, financial analyst at AJ Bell, warned this is the “fastest hike since 1977”.

Sarah Coles, senior personal finance analyst, Hargreaves Lansdown said: “Food and non-alcoholic drink continued to feed inflation – up 16.4 percent in a year.

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“We saw some really painful rises in the price of some essentials, including low fat milk up over 45 percent, pasta almost 37 percent, and butter and cheese around 28 percent.

“It’s no wonder the ONS found around three quarters of us are worried about the cost of living now, and 94 percent of people say the price of food is at least partly to blame.

“Those on lower incomes are hit harder, because they spend a disproportionate amount of their income on the essentials, and once they have traded down and shopped around for food, they’re left with truly horrible choices about what they can live without in their weekly shop.”

Hargreaves Lansdown data showed 15 eye-watering price rises at the supermarket:

  • Low fat milk – 45.3 percent
  • Pasta and couscous – 36.8 percent
  • Whole milk – 33.9 percent
  • Margarine and vegetable fats – 33.9 percent
  • Flour and other cereals – 30.1 percent
  • Butter – 28.4 percent
  • Cheese – 28.3 percent
  • Sauces – 27.2 percent
  • Olive oil – 25.2 percent
  • Eggs – 23.5 percent
  • Mineral water – 22.9 percent
  • Jams, marmalade and honey – 21.1 percent
  • Sugar – 20.6 percent
  • Bread – 20 percent
  • Ready-made meals – 20 percent.


It is predicted that the Bank’s Monetary Policy Committee (MPC) could slow the pace of interest rate hikes from 0.75 percent to 0.5 percent when it publishes its decision on Thursday.

Households are still vulnerable to fluctuating gas and electricity prices and rising mortgage and borrowing costs could offset any reduction families see in other areas next year too, experts suggest.

Rob Morgan, chief investment analyst at Charles Stanley, warned the pressure on households’ disposable income will not suddenly let up. As a result, he urged people to try to put away any extra money they do have when opportunities arise.

He added: “That might mean saving into cash for easy-access, or if it’s for the future, investing some of it as that at least offers the possibility of above inflation returns.”

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Alice Haine, personal finance analyst at Bestinvest suggested what households can do to prepare for the upcoming months.

She argued November’s inflation reading was largely driven by rising gas and electricity prices despite Liz Truss’ Energy Price Guarantee.

The hope is that inflation is now past its peak with the Bank of England expecting the headline rate to fall rapidly from the middle of 2023 and halve by the fourth quarter – easing the cost-of-living squeeze for consumer budgets across the country.

She said: “With a recession looming, households should prepare their finances for the challenges that an economic downturn presents – namely the risk of job loss or stagnating pay growth. There’s no doubt 2023 will be another challenging year for consumers and with worker’s incomes not stretching as far.

“Now could be a good time to draw up a budget to ensure you not only live within your means but also build up a rainy day fund for any unexpected events.

“A careful analysis of income and outgoings can help people identify where they are overspending and how to allocate their money more wisely.“

ONS chief economist Grant Fitzner pointed out that prices are still rising, just not as quickly.

He said: “Prices are still rising, but by less than this time last year, with the most notable example of this being motor fuels. Tobacco and clothing prices also rose, but again by less than we saw this time last year.

“This was partially offset by prices in restaurants, cafes and pubs, which went up this year compared to falling a year ago.”

Jeremy Hunt said he expected the UK’s economic situation would get worse before it began to improve.

Chancellor Jeremy Hunt said he expected the UK’s economic situation would get worse before it began to improve.

Mr Hunt added: “The aftershocks of COVID-19 and Putin’s weaponisation of gas mean high inflation is plaguing economies across Europe, and I know families and businesses are struggling here in the UK.

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