UK inflation rises more than expected to 3.4%
- Inflation in Britain remains the highest in the Group of Seven, despite the country's sluggish economic growth
LONDON: Britain’s main inflation measure sped up by more than expected to 3.4% in December from 3.2% in November, official figures showed on Wednesday.
A Reuters poll of economists had shown a median forecast of a rise in consumer price inflation to 3.3%.
Inflation in Britain remains the highest in the Group of Seven, despite the country’s sluggish economic growth.
But the pace of price increases is expected to slow sharply in the coming months as last year’s rises in utility costs and other government-controlled tariffs fall out of the annual comparison.
Bank of England Governor Andrew Bailey has said inflation is likely to be close to the central bank’s 2% target in April or May.
Financial markets are pricing one or possibly two quarter-point interest rate cuts by the BoE in 2026.
In December, the BoE’s Monetary Policy Committee cut Bank Rate to 3.75% but almost half its members voted for no change due to worries about the persistence of inflation pressure.
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