Numbers published by the Office for National Statistics showed the Consumer Prices Index (CPI), the main measure of inflation, rose by 10.7 per cent in the 12 months to November.
This is down from the 11.1 per cent recorded in October this year, a 41 year high. The decline to 10.7% is also the sharpest fall in 16 months.
The drop was slightly larger than most City analysts predicted, who forecast that the annual rate of price rises would slide to 10.9% last month.
Responding to the new figures, chancellor Jeremy Hunt said in a statement: “The aftershocks of Covid-19 and 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 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.”
The chancellor added on twitter: “Inflation is plaguing economies across Europe – it’s the number one enemy that makes everyone poorer. Getting it down is my top priority”.
“We have a plan to help halve inflation next year. But if we make the wrong choices, high prices will persist and prolong the pain for millions”.
Mr Hunt will be hoping today’s figures signal the start of a sustained fall in the rate of inflation in the months ahead.
The British Chamber of Commerce say that inflation may have “passed the peak”, “but prices are now at a much higher level which will be felt for months to come”.
Labour’s Rachel Reeves said the figures “show just how weak our economy continues to be”.
The shadow chancellor continued: “The question people across Britain will be asking themselves this morning is ‘do I and my family feel better off under the Tories?’. The answer will be no.
“Labour will get our economy growing and make it stronger, so that living standards can go up and so we can lead on the global stage again.”
The Resolution Foundation have pointed out that poorer households are still suffering an even higher inflation rate than average.
The effective inflation rate for the poorest tenth of household is around 12.1%, Resolution has calculated, with the richest tenth of households experiencing a 9.4% rate.
Jack Leslie, senior economist at the Resolution Foundation, said: “With price rises still massively outstripping pay rises – and Britain’s poorest families facing an inflation rate of over 12 per cent – families are still getting poorer month-on-month, and the cost-of-living crisis will continue to deepen in 2023”.