UK inflation slowed in December, according to new figures from the Office for National Statistics (ONS).
Measured by the Consumer Prices Index (CPI), inflation came in at 2.5% in the 12 months to December, down from 2.6% in November, and lower than expectations.
Significant downward contributions to the change came from restaurants and hotels, alcohol and tabacco, and clothing.
Core inflation, meanwhile, which takes out volatile factors like energy, food, alcohol and tobacco to give a clear picture of underlying trends, stood at 3.2% in the 12 months to December, decreasing from 3.5% in November.
Martin Sartorius, Principal Economist, CBI, said: “Inflation remained moderately above the Bank of England’s 2% target in December, reflecting the impact of ongoing price pressures such as strong wage growth. Looking ahead, we expect inflation will stay elevated this year, partly due to Autumn Budget measures contributing to higher prices.
“Persistent, above-target inflation supports our expectation that the Monetary Policy Committee will loosen policy at a gradual, quarterly pace throughout 2025. The next rate cut is still likely to come in February, which will bring some respite for businesses and households as they continue to face high borrowing costs.”
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