Inflation in the UK rose for the first time in five months to 3.4% in December, pushed up by higher air fares and tobacco prices.<\/p>\n
The Office for National Statistics (ONS) said the annual inflation rate increased from 3.2% in November<\/a> after falling in October and flatlining in the previous three months. The figure overshot City economists\u2019s forecasts of a modest rise to 3.3%.<\/p>\n While analysts said the reversal of the downward trend was likely only to be temporary, City traders have now all but ruled out an interest rate cut by the Bank of England next month.<\/p>\n Part of the increase in inflation as measured by the consumer prices index (CPI) was driven by volatile items such as air fares, which rose by 28.6% in December.<\/p>\n Prices for flights always jump over the Christmas period but were compared with a particularly low level in 2024. Higher duties on tobacco products introduced by the chancellor, Rachel Reeves, in her autumn budget also came into effect in December.<\/p>\n Martin Beck, the chief economist at WPI Strategy, said: \u201cDecember\u2019s uptick in inflation should not set alarm bells ringing. The increase was largely driven by temporary and technical factors, not a broader resurgence in price pressures.\u201d<\/p>\n The squeeze on the weekly grocery shop continued over the Christmas period, however, with annual food inflation rising again to 4.5%, from 4.2% in November. The ONS said the increase was particularly driven by a rise in the price of breads and cereals.<\/p>\n Core inflation, which strips out more volatile items such as energy and food, remained the same as in November, rising at an annual rate of 3.2% in December.<\/p>\n