UK inflation took an unexpected dip last month, influenced by a decrease in hotel prices, which helped mitigate a rise in fuel costs, according to the latest official data.
The Office for National Statistics (ONS) reported that the Consumer Prices Index (CPI) inflation rate decreased to 2.5% in December, down from 2.6% in November. The CPI is how the UK measures the average change over time in the prices paid by consumers for goods and services.
Contrary to most analysts’ forecasts, which had anticipated the inflation rate would hold steady at 2.6%, December’s CPI rate still sits above the Bank of England’s target of 2%. This has sparked concerns among economists and policymakers due to stagnant economic growth.
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Grant Fitzner, ONS’s chief economist, remarked: “Inflation eased very slightly as hotel prices dipped this month, but rose a year ago. The cost of tobacco was another downward driver, as prices increased by less than this time last year.”
However, he added: “This was partly offset by the cost of fuel and also second-hand cars, which saw their first annual growth since July 2023.”
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