UK inflation rises 3.4 pc in Dec, remains above Bank of England target
LONDON: Inflation in the United Kingdom rose in December for the first time in five months, pushing further above the Bank of England’s target, official figures showed on Wednesday.
The Office for National Statistics said the consumer prices index rose by an annual rate of 3.4% in December, up from 3.2% in November. It said increases in taxes on tobacco products and spending on trips abroad over Christmas contributed to the rise.
The increase was slightly lower than anticipated, with most economists predicting a rise to 3.5%. They said December’s rise was likely to be a temporary blip on a downward path towards the Bank of England’s target rate of 2%.
James Smith, research director at the Resolution Foundation think tank, said: “Big falls are due in 2026, with inflation finally returning to more normal levels.”
With inflation trending downwards, economists expected the Bank of England to cut its main interest rate from its current 3.75%.
Britain’s Labour government hoped that taming inflation and the associated reduction in borrowing costs would help bolster economic growth.
Elected in a landslide victory 18 months ago, Labour had since seen its poll ratings fall sharply, partly because an uptick in growth — its number one priority at the election — had remained largely elusive.
Treasury chief Rachel Reeves pledged after the release of the inflation data that 2026 would be the “year that Britain turns a corner.”
(With inputs from RSS/AP)
