IoD press release Cooling inflation strengthens case for rate cut
Commenting on today’s data from the Office for National Statistics that showed the annual rate of CPI inflation falling to 3.2% in November 2025, from 3.6% in October, Anna Leach, Chief Economist at the Institute of Directors, said:
“Inflation has fallen back decisively in today’s data, and by more than expected, bringing the rate to its lowest since March. Food price inflation has eased sharply to its lowest rate since April, despite typically rising at this time of year, while services inflation – a key indicator of domestic price pressure – has also edged down. Together, these figures increase the likelihood of a welcome interest rate cut tomorrow.
“Recent indicators point to a notable weakening in both the economy and the labour market, with unemployment reaching its highest level since 2015. Today’s inflation outturn has also come in below the Bank of England’s expectations, driven in part by unexpectedly soft food prices. The Bank will also assess the impact of the recent Budget on the outlook for inflation. And despite being trailed as actively disinflationary, the Budget’s effects are more mixed due to the increase in spending and borrowing over the next two years. But on balance, the case for a rate cut has been made.”
