Wed, 17 Dec 2025

Wed, 17 Dec 2025 Why this month's inflation figure may be good news for you

The rate of inflation, which charts the rising cost of living, has slowed - driven partly by essentials.

* UK inflation rate has fallen to 3.2%, down from 3.6% in October, and below the record high of 11.1% in October 2022.
* Prices rose by 17% for chocolate, but fell for olive oil (down 16%), flours, pasta, sugar, and clothing/footwear (down 0.6%).
* Food prices are slowing down, with a drop in the rate of increase from 4.9% to 4.2%, driven by lower prices for essentials like food and non-alcoholic drinks.
* This is good news for those on lower incomes who spend a larger proportion of their income on essential items.
* The Bank of England's target inflation rate is 2%, and the slowdown in price rises suggests that interest rates may be cut next year, making borrowing cheaper.
* Analysts say this will also bring lower returns for savers, but policymakers are encouraging people to invest in stocks and shares instead.
* The Financial Conduct Authority has introduced a scheme allowing banks and financial firms to give investment suggestions to customers.
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