The Consumer Price Index (CPI) fell from a high of 5% in October to 4.8% in November, the Office for National Statistics (ONS) has revealed.
This is a positive step towards economic recovery. However, the figure is still well above the Bank of England target rate of 2%.
The Retail Price Index (RPI) inflation, which includes mortgages interest payments, also fell from 5.4% in October to 5.2% in November.
The fall was largely due to downward pressures in the cost of food, petrol, clothing and furniture as well as household equipment and maintenance.
Transport costs also fell, which is great for motorists as there was a 1p litre fall in the cost of petrol between October and November.
Clothing and footwear prices actually increased by 1.2%. However, this is at a much lower rate than previous months.
Mixed news for the Christmas dinner shop
As households across the country prepare for Christmas, they might need to do some bargain hunting when it comes to food and non-alcoholic beverages.
If youíre planning a vegetarian Christmas meal, you may be in luck as the price of vegetables, bread and sweets have fallen. However, meat-eaters may want to consider a vegetarian option. The cost of meat has increased by 1.6% from October to November, compared to a rise of 1.0% for the same period in 2010.
The price of fruit rose by 6.4% in the one-month period. However, Christmas in general could be cheaper than ever as the price of vegetables, bread, cereal, jam, syrup, chocolate and confectionery fell.
No hope for savers
During September and October, when inflation was above 5%, it was at the highest level since 1992! The reduction is still a far cry from a ëstableí economy and savers are still being hit hard by the high level of inflation.
Money in accounts which have earned less than 4.8% in the last year have made a loss and declined in value, this means savers have less generally than they did 12 months ago.
Unless you have inflation linked savings accounts or ISAs, you could be at a loss.
Compare savings with Money Expert.