UK Inflation Declines to 2.5% in December: ONS
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Synopsis
According to the Office for National Statistics, Britain's Consumer Prices Index (CPI) rose by 2.5% in December 2024, a slight decrease from 2.6% in November. The data indicates that inflation eased due to lower hotel prices and slower tobacco price growth, despite rising fuel and second-hand car costs.
Key Takeaways
- UK CPI decreased to 2.5% in December 2024.
- Inflation fell slightly from 2.6% in November.
- Notable decreases in hotel and tobacco prices.
- Annual growth in second-hand car prices.
- Core CPI rose by 3.2% in December.
London, Jan 15 (NationPress) The Consumer Prices Index (CPI) in Britain experienced an increase of 2.5 per cent over the 12 months leading to December 2024, which is a decrease from 2.6 per cent recorded in November, as reported by the Office for National Statistics (ONS) on Wednesday.
According to ONS Chief Economist Grant Fitzner, inflation saw a minor decline due to a drop in hotel prices this month, compared to a year ago. Additionally, the prices of tobacco contributed to this decline, rising less than they did during the same period last year.
However, this was counterbalanced by an increase in fuel costs, along with a rise in prices for second-hand cars, which marked the first annual growth since July 2023, Fitzner noted.
The ONS indicated that the core CPI, which excludes energy, food, alcohol, and tobacco, increased by 3.2 per cent in December, down from 3.5 per cent in November. The annual rate for CPI goods rose from 0.4 per cent to 0.7 per cent, while the CPI services annual rate decreased from 5 per cent to 4.4 per cent.
These figures are closely observed by the Bank of England, which is set to make its next rate decision in February, as reported by Xinhua.
Resolution Foundation, a London-based think tank, commented, "UK inflation has remained somewhat persistent, but with both services and core inflation showing unexpected reductions, it allows the Bank of England more flexibility to lower interest rates in the upcoming months."
The National Institute of Economic and Social Research cautioned that the impending Trump presidency has amplified global uncertainty and inflation expectations.
They stated, "While we anticipate the Monetary Policy Committee (MPC) to gradually lower rates in 2025, we believe the Bank will proceed with caution, possibly keeping rates elevated for an extended period."
