UK inflation falls to 10.7% as price rises slow | Inflation

The UK inflation rate declined to 10.7% in November as the momentum behind the rising cost of food and energy began to ease amid growing fears of a long recession.

A drop in the consumer prices index (CPI) figure was slight bigger than expected by most City analysts, who forecast the annual rate of price rises would slide to 10.9% last month, from 11.1% in October.

However, there is still likely to be pressure on ministers to pay higher wages across the public sector to close the gap between earnings and rising prices.

Bank of England officials are expected to come under intense pressure to increase interest rates when they meet on Thursday to set the central bank’s base interest rate.

The monetary policy committee is predicted to push the base rate up by 0.5 percentage points to 3.5%. Before the figures, Jeremy Hunt said he expected the UK’s economic situation would get worse before it began to improve.

More details soon …