Inflation slows to 10.7% – and may have passed its peak

Has inflation peaked? The Consumer Prices Index fell to 10.7 per cent last month, down from 11.1 per cent in October. This follows predictions that October would be the month in which inflation peaked – so this morning’s figures from the Office for National Statistics will raise hopes that the worst may be behind us. This doesn’t appear to be a blip. The market expects this to continue for the next two years before bottoming out in 2025. There will be optimism, too, that we can look forward to a sharp fall in the CPI over the next few months as the surge in energy prices begins to drop out of the figures.

Global oil prices have fallen sharply, as have wholesale gas prices. It is also good news, from an inflation point of view, that the pound has started a sturdy recovery against the dollar – it is stronger against the currency than at any point since the middle of June.