2024.01.1706:59:00UTC+00UK Inflation Accelerates Unexpectedly

UK consumer price inflation picked up unexpectedly in December on alcohol and tobacco prices, data from the Office for National Statistics revealed on Wednesday. The consumer price index rose 4.0 percent on a yearly basis, slightly faster than November's 3.9 percent increase. The rate was forecast to ease to 3.8 percent.

The inflation rate increased for the first time since February 2023. Nonetheless, the ONS said the annual rate in December 2023 was the second lowest since September 2021.

Month-on-month, the CPI gained 0.4 percent, offsetting the 0.2 percent decrease a month ago. Prices were expected to climb 0.2 percent.

Core inflation that excludes energy, food, alcohol and tobacco held steady at 5.1 percent in December. This was above economists' forecast of 4.9 percent.

Another data from the ONS showed that output prices rose for the first time in three months in December. Prices gained 0.1 percent annually, reversing a 0.1 percent fall in November.

On a monthly basis, output prices slid 0.6 percent after staying flat a month ago. The annual fall in input prices deepened to 2.8 percent in December from 2.7 percent in November.

On a monthly basis, input prices fell 1.2 percent, which was the largest fall since June 2023. This follows a revised 0.4 percent fall in November.