UK inflation eases to 10.7% as annual rate of price increases slows

Drop in consumer prices index had been forecast but costs continue to rise, adding to pressure on ministers to raise pay

• Analysis: Inflation is still causing pain and Bank risks making situation worse
• Business live updates: UK inflation eases slightly' to 10.7%

UK inflation declined at the sharpest rate in 16 months to 10.7% in November as the momentum behind the rising cost of clothing and petrol began to ease amid growing fears of a long recession.

The drop in the consumer prices index figure was slightly bigger than expected by most City analysts, who forecast the annual rate of price rises would slide to 10.9% last month, from 11.1% in October.