London Daily

Focus on the big picture.
Saturday, Jul 05, 2025

Inflation eases to 10.7% but the cost of a night out surges ahead of Christmas

Inflation eases to 10.7% but the cost of a night out surges ahead of Christmas

The ONS says the cost of a Christmas party has risen at its fastest rate since 1991, but charts a decline in the overall pace of inflation, led by motor fuels.

The rate of inflation eased to 10.7% from 11.1% last month, according to official figures showing that food and the cost of a night out continue to rise in price ahead of Christmas.

The Office for National Statistics (ONS) said falling motor fuel prices led the decline in the core consumer prices index (CPI) measure of inflation.

It reflected falling oil costs and a meaningful recovery in the value of the pound versus the dollar on which oil costs are pegged.

Overall, fuel prices rose by 17.2% in the year to November - down from 22.2% in the year to October, the ONS said.

It reported that the largest upwards contribution to the inflation number last month came from rising prices in restaurants, hotels, cafes and pubs - led by alcoholic drinks.

The ONS added that the annual rate of inflation in this particular sector of hospitality was running at its highest level since 1991, at 10.2%.

The overall CPI rate came in lower than economists had expected.

Many suggested we may now be past the peak, which was running at a 41-year high in October.

The cost of living crisis, however, shows little sign of easing up in any substantial way given that household energy bills are running at record levels, despite government support, amid the first cold snap of the 2022/23 winter.

The ONS said energy and food costs remained the main drivers of inflation, with food running at an annual rate of 16.4%.


Food inflation was running at 16.4% last month ahead of the core Christmas season

The Bank of England is widely expected by economists to add to the bills of borrowers on Thursday by raising Bank rate again as part of its battle against inflation.

A hike of at least 0.5 percentage points is forecast by the bulk of experts as policymakers across the West continue to bear down on the price threats posed to their economies from Russia's war in Ukraine.

The invasion in February exacerbated the rising tide of price rises caused by economies reopening after COVID disruption, as many commodities, including food staples, widely produced in both countries soared in cost.

The cost of manufacturing goods has added to the bills substantially too because of Russia's historic role in supplying oil and gas - now reduced to a trickle in comparison amid sanctions regimes.

The Bank of England can do nothing to bear down on these prices, but it can act to take demand out of the economy - helping prices fall back - through Bank rate increases.

It believes that the country is already in the grip of a recession, defined by two consecutive quarters of negative growth.

A contraction in the third quarter of the year - July to September - is expected to be followed by a further dip in the current October to December quarter.

Chancellor Jeremy Hunt responded to the ONS price figures by declaring inflation as "the number one enemy".

He said: "The aftershocks of COVID-19 and (Vladimir) Putin's weaponisation of gas mean high inflation is plaguing economies across Europe and I know families and businesses are struggling here in the UK.

"Getting inflation down so people's wages go further is my top priority, which is why we are holding down energy bills this winter through our energy price guarantee scheme and implementing a plan to help halve inflation next year.

"I know it is tough for many right now but it is vital that we take the tough decisions needed to tackle inflation - the number one enemy that makes everyone poorer.

"If we make the wrong choices now, high prices will persist and prolong the pain for millions."

Newsletter

Related Articles

0:00
0:00
Close
London Stock Exchange Faces Historic Low in Initial Public Offerings
A new online platform has emerged in the United Kingdom, specifically targeting Muslim men seeking virgin brides
Trump Celebrates Independence Day with B-2 Flyover and Signs Controversial Legislation
Boris Johnson Urges Conservatives to Ignore Farage
SNP Ordered to Update Single-Sex Space Guidance Within Days
Starmer Set to Reject Calls for Wealth Taxes
Stolen Century-Old Rolls-Royce Recovered After Hotel Theft
Macron Presses Starmer to Recognise Palestinian State
Labour Delayed Palestine Action Ban Over Riot Concerns
Swinney’s Tax Comments ‘Offensive to Scots’, Say Tories
High Street Retailers to Enforce Bans on Serial Shoplifters
Music Banned by Henry VIII to Be Performed After 500 Years
Steve Coogan Says Working Class Is Being ‘Ethnically Cleansed’
Home Office Admits Uncertainty Over Visa Overstayer Numbers
JD Vance Questions Mandelson Over Reform Party’s Rising Popularity
Macron to Receive Windsor Carriage Ride in Royal Gesture
Labour Accused of ‘Hammering’ Scots During First Year in Power
BBC Head of Music Stood Down Amid Bob Vylan Controversy
Corbyn Eyes Hard-Left Challenge to Starmer’s Leadership
London Tube Trains Suspended After Major Fire Erupts Nearby
Richard Kemp: I Felt Safer in Israel Under Attack Than in the UK
Cyclist Says Police Cited Human Rights Act for Riding No-Handed
China’s Central Bank Consults European Peers on Low-Rate Strategies
AI Raises Alarms Over Long-Term Job Security
Saudi Arabia Maintains Ties with Iran Despite Israel Conflict
Musk Battles to Protect Tesla Amid Trump Policy Threats
Air France-KLM Acquires Majority Stake in Scandinavian Airlines
UK Educators Sound Alarm on Declining Child Literacy
Shein Fined €40 Million in France Over Misleading Discounts
Brazil’s Lula Visits Kirchner During Argentina House Arrest
Trump Scores Legislative Win as House Passes Tax Reform Bill
Keir Starmer Faces Criticism After Rocky First Year in Power
DJI Launches Heavy-Duty Coaxial Quadcopter with 80 kg Lift Capacity
U.S. Senate Approves Major Legislation Dubbed the 'Big Beautiful Bill'
Largest Healthcare Fraud Takedown in U.S. History Announced by DOJ
Poland Implements Border Checks Amid Growing Migration Tensions
Political Dispute Escalates Between Trump and Musk
Emirates Airline Expands Market Share with New $20 Million Campaign
Amazon Reaches Milestone with Deployment of One Millionth Robot
US Senate Votes to Remove AI Regulation Moratorium from Domestic Policy Bill
Yulia Putintseva Calls for Spectator Ejection at Wimbledon Over Safety Concerns
Jury Deliberations in Diddy Trial Yield Partial Verdict in Serious Criminal Charges
House Oversight Committee Subpoenas Former Jill Biden Aide Amid Investigation into Alleged Concealment of President Biden's Cognitive Health
King Charles Plans Significant Role for Prince Harry in Coronation
Two Chinese Nationals Arrested for Espionage Activities Against U.S. Navy
Amazon Reaches Major Automation Milestone with Over One Million Robots
Extreme Heat Wave Sweeps Across Europe, Hitting Record Temperatures
Meta Announces Formation of Ambitious AI Unit, Meta Superintelligence Labs
Robots Compete in Football Tournament in China Amid Injuries
Trump Administration Considers Withdrawal of Funding for Hospitals Providing Gender Treatment to Minors
×