17 January: Inflation Creeps Back Up To 4% In December
The annual rate of inflation nudged up from 3.9% in November to 4% in December, reversing a recent downwards trend and reducing the likelihood that borrowing costs will come down in the coming months, writes Andrew Michael.
Today’s Consumer Prices Index (CPI), from the Office of National Statistics (ONS) shows that CPI rose by 0.4% last month, the same rate of increase as December 2022.
Core CPI, which omits volatile data for energy and food, rose by 5.2% in the year to December, the same rate as November.
CPI including owner-occupiers’ costs (CPIH) rose by 4.2% in the 12 months to December 2023, the same figure as a month earlier.
The ONS said the largest upward influence to changes in both the CPI and CPIH came from rising prices for alcohol and tobacco. These were offset by falls in the cost of food and non-alcoholic drinks.
Grant Fitzner, ONS chief economist, said: “The rate of inflation ticked up a little in December, with rises in tobacco prices due to recently introduced duty increases. These were partially offset by falling food inflation, where prices still rose but at a much lower rate than this time last year.
“The prices of goods leaving factories are little changed over the last few months, while the costs of raw materials remain lower than a year ago.”
Before Christmas, the Bank of England, which is tasked by government to keep long-term UK inflation at 2%,…
