UK inflation falls to 20-month low led by cheaper petrol prices in Christmas boost for households

UK inflation fell to a 20-month low in November led by cheaper petrol prices in a boost for consumers in the run up to Christmas.

Consumer prices rose by 2.3 per cent in November, down from 2.4 per cent the previous month and the slowest rate since March 2017, according the Office for National Statistics.

A substantial drop in crude oil prices was offset by rises in tobacco prices following the Budget, ONS said.

The prices of computer games and concert tickets also dipped in November.

“Inflation returning towards the Bank of England’s two per cent target is good news for workers, who are receiving the dual benefit of accelerating wages and slowing inflation, pushing up their income growth in real terms,” PwC economist Mike Jakeman said.

Petrol prices fell by 2.6 pence per litre between October and November compared with a rise of 1.8 pence per litre over the same period in 2017.

Analysts predicted the oil prices downturn could continue into next year forcing inflation lower.

“Inflation should trend down over the first half of 2019. The recent falling back in oil prices should increasingly impact, while Ofgem’s price cap will put some downward pressure on domestic energy prices in January,” EY Item Club analyst Howard Archer said.

ONS head of inflation Mike Hardie said: “Inflation was little changed as falling petrol prices, thanks to a substantial drop in the cost of crude oil, were offset by rises in tobacco prices following the duty changes announced in the Budget.

“House price growth continued to slow with the smallest annual rise seen in over five years, led by price falls across London