ICAEW.com works better with JavaScript enabled.

Painful deceleration on the way as inflation slows

Author: ICAEW Insights

Published: 14 Dec 2022

Official data from the Office for National Statistics reveals that UK inflation slowed slightly to 10.7% in November, but still the second highest rate since August 1980.

The inflation figures released on Wednesday 14 December 2022 by the Office for National Statistics (ONS) reported that the Consumer Prices Index (CPI) rose by 10.7% in the 12 months to November 2022, down from 11.1% in October. Core inflation – which strips out volatile items such as food, energy, alcohol, and tobacco – stood at 6.3% in the year to November, down from 6.5% from the previous month.

The easing in the annual inflation rate in November largely reflected price changes in the transport division, particularly for motor fuels and second-hand cars. There were also downward effects from tobacco, accommodation services, clothing and footwear, and games, toys and hobbies. The largest upward effect came from price rises for alcohol in restaurants, cafes and pubs.

The annual inflation rate for transport was 7.6%, down for a fifth consecutive month from a peak of 15.2% in June 2022, and the lowest rate since June 2021. The main drivers behind the easing in the rate came from motor fuels and second-hand cars. Overall, fuel prices rose by 17.2% in the year to November, down from 22.2% in the year to October. This is principally a base effect with petrol prices unchanged between October and November this year but rising by 7.2p per litre between the same two months of 2021. Second-hand car prices fell by 5.8% in the year to November, compared with a fall of 2.7% in the year to October. The annual rate has eased for the eighth consecutive month since March 2022, when it was 31.0%.

Food and non-alcoholic beverage prices rose by 16.5% in the 12 months to November, slightly up from 16.4% in October. The annual rate of inflation for this category has risen for 16 consecutive months, from minus 0.6% in July 2021, and is the highest rate since September 1977.

On a monthly basis, UK CPI rose by 0.4% in November, compared with a rise of 0.7% in November 2021. The largest downward contribution came from transport, particularly motor fuels, with rising prices in restaurants, cafes and pubs making the largest upward contribution. 

Responding to the latest UK inflation figures, Suren Thiru, Economics Director for ICAEW, said: “While these figures suggest inflation has peaked, it nevertheless remains at a precariously high rate, which is having a real impact on people and businesses. November’s slowdown could be the start of a painful deceleration in inflation as slowing demand, rising interest rates and falling commodity prices weaken the headline rate, but at the cost of a protracted recession and notably higher unemployment.

“With inflationary pressures looking more broad-based, the pace of easing is likely to be slow, which implies that wage growth will continue to trail inflation for some time, providing little respite to financially squeezed households.

“Although another large interest rate rise on Thursday is inevitable, a growing split in Monetary Policy Committee voting could point to a more moderate pace of monetary tightening as recession risks crystallise.”


A closer look at the impact of inflation on people, businesses, accountancy and the wider economy, bringing together the best expert opinion, data and analysis from ICAEW and its members.

A graph going upwards

Discover more from ICAEW Insights

Insights showcases news, opinion, analysis, interviews and features on the profession with a focus on the key issues affecting accountancy and the world of business.

Podcast icon
Insights Podcast

Hear a panel of guests dissect the latest headlines and provide expert analysis on the top stories from across the world of business, finance and accountancy.

Find out more
Daily summaries
Three yellow pins planted into a surface in a row
News in brief

Read ICAEW's daily summary of accountancy news from across the mainstream media and broader financing sector.

See more
A megaphone
Stay up to date

You can receive email update from ICAEW insights either daily, weekly or monthly, subscribe to whichever works for you.

Sign up