The pause follows a period which saw 14 successive increases, as the Bank tried to control inflation.
What is the Bank of England?
The Bank of England is the UK's central bank. It is independent of government but works closely with the Treasury.
That was a sharper than expected drop from 4.6% in October, and is the lowest rate in two years.
The fall was largely due to cheaper petrol and diesel.
However, CPI is still almost double the Bank's target.
Another important measure, "core" CPI - which excludes the price of energy, food, alcohol and tobacco - dropped to 5.1% in November, down from 5.7% in October.
The recent sharp increases in inflation were initially due to rising energy and food costs - largely caused by global events such as the war in Ukraine. But other factors - like wage increases in the UK - had also helped keep prices high.
The bank's traditional response to rising inflation is to increase the UK's official interest rate.
This influences the saving and borrowing rates charged by High Street banks to individuals and businesses.
From November 2021, the Bank increased interest rates on 14 successive occasions.
However, in September, November, and December, the Bank held them for a third time, and signalled that rate cuts are unlikely in the near future.
How does changing interest rates affect inflation?
Higher interest rates mean people have to pay more for their mortgages, for example, which means they have less money to spend on other things.
Fewer people wanting to buy things should, in theory, mean that prices rise less quickly.
It also makes it harder for firms to borrow money and expand.
Alternatively, if the bank cuts interest rates, borrowing becomes cheaper, and people have more money to spend on other things.
This can encourage businesses and people to borrow and spend more, boosting the economy.
Announcing its latest decision to hold rates in November, the Bank of England said higher interest rates were "working to reduce inflation". But it warned that rates "will have to remain where they are now for an extended period" - and could rise again.
How does the Bank of England change interest rates?
The Bank's Monetary Policy Committee (MPC) meets eight times a year to set rates.
Its nine members vote on whether to increase, reduce or hold interest rates.
Minutes of the meeting at which the decision was taken are also published.
Four times a year, the bank also publishes a Monetary Policy Report which sets out the economic analysis and inflation projections that the MPC uses to make its interest rate decisions.
What else does the bank do?
The Bank of England also buys and sells government bonds
Bonds are a bit like an "I owe you" from the government, which uses them to raise money to help meet its spending commitments.
In the period from the 2009 financial crisis until 2021, the Bank of England bought £875bn of government bonds. This was done through a process called quantitative easing, which was designed to reduce overall government borrowing costs, lower interest rates and stimulate spending in the economy.
The bank also announced an emergency bond-buying programme to try to stabilise the economy after September 2022's mini-budget caused turmoil on financial markets.
Once that intervention ended, the bank said it would go ahead with a plan - first announced in August 2022 - to sell off some of the government bonds it holds.
What are the bank's other responsibilities?
The bank also:
- produces banknotes and oversees credit and debit card payments
- regulates banks and building societies
- monitors risks in the UK financial system and acts to reduce them, like lending to banks if they need it. It shares responsibility for this with the Treasury and financial regulator, the Financial Conduct Authority
- stores the UK's gold reserves - 400,000 bars worth more than £200bn - as well as those of other central banks.
Who is in charge of the Bank of England?
Andrew Bailey took over as governor in 2019, having already worked at the bank for more than 30 years.
He was the bank's chief cashier from January 2004 until April 2011, which meant his signature appeared on billions of UK banknotes.
As well as being responsible for overseeing the bank, the governor also chairs three important committees that help it work towards its targets: the Monetary Policy Committee, the Financial Policy Committee and the Prudential Regulation Authority.