Has inflation finally peaked? November’s Consumer Prices Index fell to 10.7 per cent last month, down from the 42-year high of 11.1 per cent in October and below expectations. That drop is likely to be deemed sufficient that the Bank of England’s Monetary Policy Committee can at least slow the pace of interest rate rises, from 0.75 per cent to 0.5 per cent when it publishes its decision tomorrow.
But there is plenty of pain to come. The headline measure of inflation may have fallen — in large part thanks to lower fuel prices, with the cost of filling up a car falling sharply — but food and drink prices continue to soar, up 16.5 per cent, the highest since September 1977. Low fat milk — few people’s idea of a luxury good — is up an extraordinary 45.3 per cent.
