UK CPI: surprise uptick in inflation
Annualised inflation rose to 4% in December, up from 3.9% in November, largely driven by rises in the price of cigarettes and alcohol.
Annualised inflation was forecast to come in at 3.8% (Trading Economics).
Core Inflation came in at 5.1% in the 12 months to December 2023, unchanged from 5.1% in November.
Nicholas Hyett, Investment Analyst, Wealth Club
“A surprise jump in inflation is not good news.
Policy makers, mortgage holders, investors and the average shopper had all been hoping price rises continued to slow over Christmas – clearing the way for lower interest rates and easing the cost of living crisis. Christmas was particularly expensive for those indulging over the festive break, with alcohol and tobacco the driving forces behind the uptick inflation, although food and non-alcoholic drinks continued to see inflation slow.
But, while the rise in headline inflation will attract the attention, longer term its the stubbornly high core inflation that is a greater concern. Still running at over 5.1%, until this comes down the UK will be very vulnerable to global economic shocks that cause spikes in food and energy prices – and we’ve seen all too many of them recently.”