UK inflation slowed significantly in November

Inflation in Britain rose 0.3% in November, following 0.7% rise in October and fell below 0.6% consensus, slowing much more than expected and keeping inflation close to multi-year low at 0.2%, hit in August.

Big discounts on Black Friday sales are likely to be blamed for slowing the inflation, as clothing and footwear prices fell by 2.7% – the biggest drop for November on record, as  increased discounting  in some cases extended across the month.

Clothing sales have struggled since the beginning of pandemic and some major clothing retailers have fallen into financial difficulties.

Economists expect inflationary pressures to rise further, with Bank of England expected to note the weakness of inflation in its policy meeting on Thursday, as the central bank predicted inflation to stay around 0.5%.

British pound showed no reaction to downbeat inflation figures and rose against its major counterparts, underpinned by optimism for a breakthrough in Brexit trade talks.