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British inflation cools, but still high at 10.7%

Declining fuel prices led to a slump in inflation, though the cost of going out offset some of the relief.

The costs at restaurants, pubs and cafes helped keep British inflation above 10%, though lower fuel costs provided some relief. File photo by Andy Rain/EPA-EFE
1 of 3 | The costs at restaurants, pubs and cafes helped keep British inflation above 10%, though lower fuel costs provided some relief. File photo by Andy Rain/EPA-EFE

Dec. 14 (UPI) -- Inflation in the British economy followed its peers with a move lower, though the high cost of dining out kept levels above 10%, data published Wednesday show.

The government's Office of National Statistics showed the Consumer Price Index increased by 10.7% over the 12-month period ending in November, down from the 11.1% reading over the previous 12-month stretch. That brings consumer-level inflation down from its 40-year high for the economy.

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A separate index that includes housing costs increased by 9.3% during the 12-month period, down from the 9.6% reported for the period ending in October.

ONS attributed the decline in both indices to a slump in the cost of motor fuels, though stubbornly-high prices at restaurants, cafes and pubs offset some of the relief that came as a result of lower commodity prices.

"Overall, fuel prices rose by 17.2% in the year to November 2022, down from 22.2% in the year to October," ONS stated.

Commodity prices have been on a steady decline for much of the fourth quarter, driven by fears of a global recession. While price pressures are easing, inflation is still well above levels that central bank policymakers are looking for and will influence their pending rate decisions accordingly.

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Inflation in the British economy started the year closer to 5.5%, still above the target rate of 2% annually. That's likely to encourage the Bank of England to raise its key lending rate by 50 basis points. That too is following broader trends from Western policymakers as both the U.S. Federal Reserve and the European Central Bank are expected to raise their rates in kind later this week.

Gross Domestic Product in the British economy improved by 0.5% in October, the last full month for which the government has data. That followed a contraction of 0.6% in September.

The economy has fumbled since exiting the European Union in 2020. Former Prime Minister Liz Truss was the shortest-tenured leader ever, resigning after 45 days in office after her tax cut plan led to the devaluation of the British currency.

Two months and a new prime minister, Rishi Sunak, later and the ONS reported that the services sector -- comprised of intangibles like housecleaning or nursing -- was the main driver of growth in GDP, expanding by 0.6% in October.

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