It’s that time of the month again when everyone from homeowners to savers holds their breath. Tomorrow, on 17 December, we’ll get the latest snapshot of how prices are behaving across the UK. After a few months of stubborn figures, the big question on everyone’s mind is simple: did inflation finally start to cool off in November?
I always find these releases a bit nerve-wracking. They don’t just tell us about the past – they hint at where interest rates might head next, and that affects everything from mortgage payments to the return on your savings. So let’s dive in and unpack what we know so far, what might happen tomorrow, and why it all matters.
Why Tomorrow’s Inflation Data Really Matters
We’ve been on a rollercoaster with inflation since the pandemic. Prices shot up, central banks hiked rates aggressively, and now we’re in this awkward phase where inflation is coming down but not as quickly as many hoped. The UK has been no exception.
Last month’s reading for October showed the Consumer Prices Index (CPI) at 3.6%. That’s down slightly from the previous months but still well above the Bank of England’s 2% target. It was a bit of a disappointment, honestly, because many economists had pencilled in a sharper drop.
Now, with November’s data landing right before the Bank of England’s Monetary Policy Committee meeting on Thursday, the stakes feel higher than usual. A lower number could strengthen the case for an interest rate cut early next year. A higher one? Well, that might mean base rate stays put for longer.
Recapping Recent Trends
Let’s take a quick step back. Inflation peaked at eye-watering levels a couple of years ago – remember when it hit double digits? Since then, it’s been a slow grind lower. Energy prices stabilised, supply chains unclogged, and food inflation eased considerably.
But services inflation – think things like hospitality, insurance, and rents – has proven stickier. That’s partly why the overall figure hasn’t plunged as fast as some predicted. In my view, it’s these underlying pressures that make each release so unpredictable.
- October CPI: 3.6% year-on-year
- September: around 3.8% (a slight easing)
- Core inflation (excluding food and energy): still elevated
- Services inflation: the real headache for policymakers
Perhaps the most interesting aspect is how external factors keep popping up. Global energy costs, wage growth, even weather impacting food prices – it’s never straightforward.
What Economists Are Expecting for November
The consensus seems to lean towards a small dip. Many forecasts point to something around 3.3% or 3.4%. That would be welcome news, suggesting the downward trend is resuming.
But forecasts have been wrong before. Some analysts warn that seasonal factors – early Christmas spending, Black Friday deals not fully kicking in yet – could keep the number elevated. Others highlight potential upside risks from transport costs or imported goods.
Inflation rarely moves in a straight line. Expect bumps along the road to 2%.
– Common view among UK economists
I’ve found that the range of predictions is unusually wide this time. That alone tells you there’s genuine uncertainty in the air.
The Broader Economic Picture
Inflation doesn’t exist in a vacuum. Today’s labour market data added another layer. Unemployment ticked up to 5.1%, and wage growth, while still solid, showed signs of cooling.
A weakening jobs market typically argues for looser monetary policy – lower rates to support growth. But if inflation stays hot, the Bank faces a tough balancing act: fight prices or protect jobs?
In my experience following these cycles, central banks hate being forced into that choice. They’ll err on the side of caution if price pressures linger.
Longer-Term Forecasts and the OBR View
Looking further ahead, official projections offer some comfort. The Office for Budget Responsibility expects inflation to average around 2.5% next year before hitting the 2% target in 2027.
That suggests many believe we’ve already seen the peak for this cycle. Fiscal policy – taxes, spending – will play a role too. Recent budget measures could add a touch of upward pressure in the short term, but the overall trajectory looks downward.
- 2025: elevated but falling
- 2026: closer to 2.5%
- 2027: back at target
Of course, forecasts are just educated guesses. Geopolitical shocks, climate events, or shifts in global demand can derail even the best-laid plans.
How This Affects Everyday Finances
Let’s bring it home. If inflation drops tomorrow, markets will likely price in earlier rate cuts. That could mean cheaper mortgages for those remortgaging and perhaps better returns as savings rates adjust.
On the flip side, persistent higher inflation keeps borrowing costs elevated and erodes purchasing power. Groceries, energy bills, insurance – all feel the pinch when prices rise faster than wages.
Savers have enjoyed decent rates lately, but they’d prefer stability over volatility. Homeowners, especially on variable deals, are probably counting the days until cuts arrive.
| Scenario | Likely Impact on Rates | Winner | Loser |
| Inflation falls sharply | Earlier cuts probable | Borrowers | Savers (short term) |
| Inflation stays high | Rates on hold longer | Savers | Mortgage holders |
| Surprise spike | Possible hike signal | Cash holders | Everyone else |
No one wins when uncertainty drags on, though. Clear signals from data help everyone plan better.
Understanding CPI vs Other Measures
A quick word on the numbers. The headline CPI is what the Bank targets. But we also get core CPI, services CPI, and sometimes people reference RPI – an older measure that’s higher because of how housing costs are calculated.
Why does it matter? Because policymakers look through the noise. Food and energy can be volatile, so core measures give a cleaner view of domestic pressures.
Tomorrow, watch not just the headline but the breakdown. If services inflation eases, that’s a big green light.
What History Tells Us About December Releases
December data often carries seasonal quirks. Retailers discount heavily, travel costs fluctuate, and energy tariffs can shift. November captures some early festive spending but not the full Christmas rush.
Past years have seen surprises both ways. Sometimes base effects – comparing to a high month last year – help pull the number down. Other times, demand surges keep it up.
This year, with energy prices relatively stable compared to 2024’s volatility, we might avoid big shocks. Fingers crossed.
The Bank of England’s Dilemma
Thursday’s MPC meeting will digest tomorrow’s number alongside today’s jobs data and global developments. Most expect rates to stay at the current level, but the tone of the statement will be crucial.
Are they more worried about growth or inflation? The voting split among committee members often reveals divisions. A dovish tilt could boost markets; hawkish comments might dampen expectations for quick cuts.
Personally, I think they’re itching to ease but need cover from the data. A soft inflation print would give them exactly that.
Global Context: We’re Not Alone
Inflation trends in the US and eurozone influence the pound and imported costs. The Fed has been cutting, the ECB too. If the UK lags behind, sterling might weaken, pushing up import prices – a classic inflation risk.
Keeping an eye on peers matters. Divergence in policy can create currency moves that feed back into domestic prices.
What to Watch Tomorrow Morning
The release hits at 7am sharp. Markets will react instantly. Pound sterling, gilt yields, FTSE – all move on the headline.
- Headline CPI year-on-year
- Month-on-month change
- Core and services breakdown
- Any ONS commentary on drivers
I’ll be refreshing like everyone else. Whatever the number, it’ll spark debate and shape expectations for months ahead.
In the end, getting back to 2% sustainably is the goal. We’re closer than we were, but the last mile often feels the longest. Tomorrow’s data will tell us if we’re picking up pace or hitting another bump.
Whatever happens, it’s a reminder that economics affects real lives. From the weekly shop to long-term plans, these numbers touch us all. Here’s hoping for a bit of good news just before the holidays.
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