We're wrapping up our live coverage now. Here's a round-up of what's been happening this morning:

• The UK inflation rate dropped slightly to 10.7% in November, down from 11.1% in the year to October, according to new figures released by the Office for National Statistics, external
• But the cost of living is still close to a 40-year high
• The price of food and non-alcoholic drinks went up by 16.5% in the 12 months to November - up slightly from 16.4% in October. It marks the highest rate seen since 1977

• One of the big drivers behind inflation starting to slow was an easing of the costs of petrol and diesel and second-hand cars
• Fuel prices rose by 17.2% in the year to November 2022, down from a 22.2% increase in the year to October
• But the chief economist at the ONS said it's too early to say we're past the peak of inflation

What is inflation, why does it matter, and is someone to blame if it goes up?

Understanding inflation will help you understand why your shopping is getting more and more expensive and why prices rarely seem to come down.

In the first episode of this BBC series, Tim Harford explains why the inflation figure you see on the TV might not reflect the price rises you’re experiencing and economic historian Victoria Bateman tells us why having a boat load of silver coins isn’t always a good thing.

We've heard the news this morning that the UK's inflation rate has dropped slightly to 10.7%.

But how does that compare to other countries? Some countries measure inflation figures in slightly different ways, but here are some updated rates that have emerged over the last 24 hours.

In the United States, inflation was 7.1% over the 12 months to the end of November, dropping from 7.7% in October.

Inflation in Germany is running at 7.8% this year, the Ifo economic institute said in a statement this morning.

New data from Sweden's Statistics Office puts consumer price index at 11.5%, up from 10.9% in October.

In Spain, the 12-months to November saw inflation at 6.8%, down from 7.3% the previous month.

James Cheyne
BBC Scotland

When we visited Toys Galore in Edinburgh, the owner of the shop, Donald Nairn told us he has never known business to be as tough as it is now.

"If you'd asked me in 2019 what the next few years would be like I could not have possibly imagined in my wildest dreams it would have been as challenging as it has been," he said.

That's because toys have gone up in price due to rises in production and global shipping costs as well as the pound being weaker, he explains.

But he says there's a limit to how much he can put up prices for his customers.

"There have been some products where we have simply decided not to sell it anymore because we think the price has gone up so much that it's no longer sellable," he said.

And he's noticed his customers are being a lot more cautious in their spending.

"Most people are struggling because they've seen all the costs go up - interest, fuel, food and yet their wages just haven't kept up so everything's squeezed.

"Although they will still buy a toy for a birthday or Christmas present they will buy a smaller toy or there might not be a trip to a toy shop on a Saturday.

"I think people try to do their best to make Christmas as normal as possible but undoubtedly people will be cutting back a bit."

Image source, Getty Images

Energy prices are soaring across the UK and many of us are looking for ways to reduce our bills. Can changing the way we cook - like finding an alternative to using the oven, help?

Microwaves, slow cookers, electric pressure cookers and air fryers all consume significantly less energy than ovens, so using these instead, if possible, will save you money.

However, while microwaves are useful for things like defrosting and reheating food and drink, and cooking vegetables, they’re not suitable for everything. A joint of meat or roast chicken for example, is much tastier and more tender cooked in a slow-cooker or pressure cooker.

Read more on how you can save money in the kitchen here.

New research from the Joseph Rowntree Foundation, a charity which conducts and funds research aimed at solving poverty in the UK, says the government has not gone far enough to support people struggling financially, with low-income households' finances continuing "to buckle under the pressure of the cost of living crisis."

Its report says, external that:

• 7.2 million people are going without essentials, such as food, showers or adequate clothing
• 4.7 million are behind on their bills
• Over 3 million households have not been able to keep their home warm

"It cannot be right that in a wealthy country like ours, so many are going without the absolute essentials needed for a decent life."

With the price of essentials rising many of us are thinking hard about luxuries and spending money on entertainment, though some venues are attempting to absorb their own rising costs.

Billy Williams, managing director of Reading Winter Wonderland, said visitors numbers had stayed high while he tried not to pass on increasing expenses to customers.

"Business has been very good this year but the worst thing about it has been fuel, gas, diesel all doubled [in price].

"We have free entry and the ticket prices [for attractions] haven't gone up for three years but there is going to come a time if prices keep increasing that we will have to pass that on to customers.

"Food prices have nearly doubled and we now have delivery charges on the vans now."

Asked how he was managing to keep costs to customers down, he said: "We just work harder, we cut down on staff, we do more work ourselves."

He has noticed a rise in phone calls asking for group discounts. "We have noticed a lot of people paying with credit cards now rather than debit cards," he added.

Kevin Peachey
Cost of living correspondent

Savers have had a rotten time in recent years, with very little return for what they tuck away.

That has improved, with rates looking much better now. Yesterday, National Savings and Investments said that there would be more prizes from January through Premium Bonds (although the odds of winning remain the same).

A rise in interest rates by the Bank of England tomorrow may further increase returns in regular accounts.

However, high inflation is no friend of savers. It eats away at the buying power of the money set aside.

And, of course, most savers are borrowers too - and that is getting more expensive.

Image source, Getty Images

The latest official numbers released this morning confirmed something a lot of us might have noticed already: The cost of going out for a drink is rising in the run-up to Christmas.

Wine, gin and whisky all saw prices increase in the 12 months to November.

And alcohol prices went up across the board in pubs, restaurants and cafes.

Hospitality businesses have been hit by soaring energy bills, as well as higher wholesale costs, which means many have had to put prices up for customers.

The boss of one pub chain said the future looked "bleak" with customers reining in their spending.

Are you planning on cutting back on nights out in the run up to Christmas? Let us know here.

Lorna Gordon
BBC News Scotland correspondent

At Edinburgh dog and cat home Mike Dougan tells us people are struggling to feed their pets.

“The cost of living crisis means people through no fault of their own have been forced into positions which are absolutely terrible and they’re having to make horrible decisions between either feeding themselves and feeding their pet.

“A really common one we get is single mum, two kids and a dog. Kids will eat, dog will eat, mum won’t.

“It’s heartbreaking. I’m talking to people in the community who are stealing and begging and racking up debt in local shops for pet food.”

The home provides 35,000 meals a month for animals by taking pet food to 70 food banks as well as pop up community events where they give out pet food, toys and advice.

Mr Dougan says the food is donated by “amazing” individual supporters as well as supermarkets and pet stores.

“If an animal is in a home and its loved and it’s cared for that’s what we want and if we can support that through pet food that’s what we do.”

Chief executive of the home Lindsay Fyffe-Jardine CEO said it had been"hugely impacted by the cost of living crisis".

"It's a perfect storm for us it's a combination of a drop in donations, people are struggling and they're not able to support us as much as they used to, we have the issue of rising demand and also our own costs."

"Our overheads have increased by £330,000 that's everything from heating, lighting, veterinary drugs, cat litter all of that has gone up."

Behind the headline figures today, we're hearing a bit more about the different elements driving inflation that we all spend money on.

Steve Gooding, director of the RAC Foundation, said that the wholesale prices for petrol and diesel have fallen sharply in the last couple of months because of oil prices easing.

Although prices at the pump are down from the record highs seen in the summer, he said that what is being charged on the forecourts still isn't reflecting what big retailers are paying for their stock.

"We would hope that as part of their festive offer supermarkets in particular would cut the cost of fuel further still if only out of self-interest to bring people to their stores," he said.

Image source, gett

Without changing what you eat too much, it’s possible to make some easy tweaks to your existing recipes and cut your costs.

• Go for the value ranges at the supermarket instead of branded products. Retailers are keeping their essential/everyday products at lower prices and tend to price match each other too.

• Choose cheaper cuts of your favourite meats, chicken and fish. Use chicken thighs instead of breasts, cook a thin frying steak instead of a sirloin, roast a pork shoulder instead of loin and pick pollock instead of cod.

• Reduce the quantity of meat in your recipe and add extra beans or lentils instead. Adding just a handful of red lentils to a Bolognese will make it stretch to an extra portion.

• Buy the less perfect or ‘wonky’ vegetables and fruit. Buy seasonally and stretch meals with extra vegetables. Make more use of frozen vegetables and fruit and keep an eye out for special offers. Any leftover vegetables can be made into hearty soups for the freezer

• Canned tomatoes can cost up to £1 a tin. Swap for value cans at around 28p each and add a couple of tablespoons of tomato puree. One 200g tube of tomato puree holds enough to enrich 10 cans of cheap tomatoes.

• Use dried herbs instead of fresh for cooking. And look for blends of dried herbs and spices instead of buying the individual jars.

Image source, Getty Images

For many people buying food has become a source of worry as prices in our local grocers and supermarkets have shot up in the last 12 months.

We’re seeing some of the biggest rises in food costs since 1977, according to the Office for National Statistics - with the price of key staples such as bread and cereal climbing.

And food is just part of the struggle - with many having to also contend with higher energy and transport costs and mortgage rate rises.

Whether you’re a single parent struggling to feed a family, in a house share of students or an individual living alone, these prices are really starting to pinch.

Kevin Peachey
Cost of living correspondent

The inflation rate is falling. It looks like we are turning a corner. Relief all round?

Well, no. These figures are still extraordinary and we are far from back to normal.

Remember, this means a basket of goods that cost £100 a year ago now costs £110.70.

That will stretch anyone's finances and is why this is not the end of the pain of the rising cost of living.

January is traditionally a tough month for our budgets as credit card bills roll in after Christmas. This year, debt charities say essential bills and spending are tipping people into the red.

Labour's Shadow Attorney General, Emily Thornberry, says though this month's inflation figures are to be "welcomed", they are still "the second worse for 40 years".

"Yes, there is inflation across the world, and yes, there is stagnation when it comes to wages," she says, but only in the UK is the economy "actually shrinking".

"With the prospect of mortgage prices and rentals going up next year because of a lack of confidence in the markets... because of the government's behaviour just a few weeks ago with the Kwasi Kwarteng budget - where confidence in Britain crashed completely - what we really need in this country is a fresh start and a government people can believe in."

We heard this morning that inflation is running far above the Bank of England's target of 2%.

Tomorrow, the UK's central bank will hold its next meeting to decide on interest rates.

Experts are predicting that it will set its main "base rate" at 3.5%, shifting up from 3%.

Putting interest rates up is the main tool that the Bank has to try and keep costs down. It makes borrowing more expensive and - it is hoped - means people have less money to spend. As a result, they are likely to buy fewer things, slowing price rises down.

But it also means some people with variable mortgages see their monthly payments go up. Plus, when rising costs are caused by things like energy prices going up worldwide, there is a question mark over how effective putting up rates in the UK is.

Of course we'll have full live coverage of the Bank's decision here on BBC News.

We've been talking a lot about inflation this morning, but what does it mean?

Inflation is the increase in the price of something over time.

For example, if a bottle of milk costs £1 and it goes up to £1.05 a year later, then annual milk inflation is 5%.

As many of you are no doubt noticing, pay increases for lots people aren't keeping up with rising prices.

That's despite wages increasing by their fastest rate in more than 20 years.

According to official figures, external, average wages, not including bonuses, rose by 5.7% in the three months to September 2022, compared with the same period in 2021.

Wages for people working in the private sector increased by 6.6%, compared with 2.2% for those in public sector jobs. But overall, once rising costs are taken into account, average pay actually fell by 2.7%.

Unions say wages should reflect the cost of living and many have balloted their members for strike action over pay. That's why we're seeing walkouts by workers across the rail industry and Royal Mail this week, along with concerns over job security and working conditions.

However, the government argues big pay rises could push inflation even higher because companies might increase prices to cover higher wages.

Michelle O'Dwyer of Bay Tree Cookery Academy works with many centres and charities operating food schemes around Merseyside.

Speaking on BBC Breakfast this morning, she says more and more people in work are coming to community centres operating food schemes.

"They're working, but they're struggling to make ends meet and that's the real difficulty," she says.

"It's absolutely heart-breaking that people are going out, working so hard, but they're making a choice now between whether to eat or get the heating on."

She adds that volunteers at community centres are under increased pressure.

"Volunteers are really struggling now with the influx of people in crisis," she says, with many service users needing "a shoulder to cry on, as well as the food".

Image source, Reuters

Inflation is a measure of the cost of living and to calculate it, the Office for National Statistics (ONS) keeps track of the prices of hundreds of everyday items, known as a "basket of goods".

Lower inflation does not mean the prices of goods will go down, it just means they stop rising as quickly.

One of the big drivers behind inflation starting to slow was an easing of the costs of petrol and diesel and second-hand cars.

Fuel prices rose by 17.2% in the year to November 2022, down from a 22.2% increase in the year to October.

However, the ONS said average fuel prices were still way above what they were last year. In November, petrol and diesel prices stood at 163.6p and 187.9p per litre respectively, compared with 145.8p and 149.6p per litre in November 2021.

Read more here.