Rachel Reeves has found brief respite this morning, with the Office for National Statistics confirming that inflation dipped to 2.5 per cent in the 12 months to December, down from 2.6 per cent the month before. This is a smaller rise than had been expected (the consensus was 2.6 per cent) and roughly in line with the Bank of England’s forecast from November, which had predicted a 2.4 per cent increase. It’s welcome news for a Chancellor who is under pressure.
Core inflation slowed too, from 3.5 per cent in the year to November, to 3.2 per cent in December. This competes for the best news in the update, as core inflation (which does not include more volatile costs, like food) has been particularly sticky in the UK over the past couple of years.
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