Last month the BoE forecast inflation would stay below 1 per cent for the first half of next year, and since then oil prices have fallen further to near their lowest since 2008.
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Energy prices fell 1.3 percent, with gasoline prices dropping 2.4 percent after rising 0.4 percent in October.
The Consumer Price Index was unchanged in November, but increased 0.4 percent over the last 12 months, before seasonal adjustment.
Policy makers, projected to raise interest rates on Wednesday for the first time in nearly a decade, have said low energy costs and a stronger dollar are transitory influences on inflation. The US central bank is expected to lift its benchmark overnight interest rate from near zero at the end of the meeting on Wednesday, encouraged by tightening labor market conditions. “Given the ongoing weakness in worldwide food inflation, we expect upward pressures on local food inflation to be limited in the near-to-medium term”, the report said.
The only positive headline growth came from miscellaneous goods and services, where prices rose by 0.3 per cent between October and November compared with a fall of 0.1 per cent during the same period in 2014.
Low inflation is in part thanks to falling global oil prices, which has pushed down the price of petrol and, to a lesser extent, energy bills. Apparel prices fell 0.3 percent, declining for a third straight month.
Clothing & footwear inflation appears to have bottomed out; nonetheless prices in this segment continued to decline for the seventh consecutive month. Tenants’ and household insurance rose 2.3%, up from 2.1% in October.
Year over year, overall consumer prices increased by 0.5%, the highest this year.
After easing monetary policy aggressively this year, the RBI kept the key repo rate on hold at 6.75 percent earlier this month.
The Labour Department reported its consumer price index was flat in November, matching analyst expectations, after a 0.2 per cent rise in October. Incidentally, the retail inflation for rural areas is much higher at 5.95, as against 4.71 percent in urban India.
The release said the inflation rate based on CPI (General) was 5.95 percent in rural areas and 4.71 percent in urban areas.
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Retail food price jumped an annual 6.07 per cent last month, faster than October’s 5.25 per cent rise.
