What the inflation rate drop means for cost of living, interest rates and your bills

The rate of inflation in the UK has dropped slightly, to 10.7 percent from the 11.1 percent recorded in October.

However, the rate still remains high - and close to October's 41-year-record. Some experts might declare that the worst of the cost of living crisis has passed, but all the interest rate fall means is that prices are rising at a marginally lower rate than before - not that prices themselves are falling.

It has come as little relief for households and businesses, who are still facing eye-watering prices across the board.

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The Office for National Statistics (ONS) said the decline in the Consumer Prices Index (CPI) was driven by falls in the price of petrol and diesel, as well as second-hand cars. But the price of alcoholic drinks in restaurants, hotels, cafes and pubs all went up, with just weeks to go before Christmas.

November's inflation figures might give hope that the peak has passed. Economists believe that price rises will continue to slow over the coming months. But it's not for certain and price rises still aren't slowing down across the board.

Food inflation hit a 45-year high last month of 16.4%, while power costs remain elevated. Energy bills will go up again in April when the Energy Price Guarantee headline figure of £2,500 a year for the typical household rises to £3,000.

Unfortunately, wages aren't keeping up with inflation either, with pay rises still falling behind price hikes. Official figures showed that regular pay, excluding bonuses, rose by 6.1% in the three months to October – but this marked a 3.9% drop after CPI inflation is taken into account.