UK inflation eases further to 10.5% vs 10.7% earlier, read full report here

According to official figures, the rate of inflation in the United Kingdom has dropped to 10.5%, down from 10.7% in November. The Office for National Statistics (ONS) attributes the decline to a reduction in the cost of motor fuels, as well as cheaper clothing, footwear, and recreational and cultural items.

However, the ONS also notes that prices in restaurants, hotels, food and non-alcoholic beverages have increased. This announcement is the latest indication that the UK may have seen the worst of inflation, which had risen steadily since late 2021 due to supply chain problems and worker shortages caused by COVID lockdowns, as well as Russia's invasion of Ukraine. This event led to countries seeking other energy sources, which in turn pushed up the cost of energy and other goods that require energy input.




While this decrease in inflation may be good news for some, it may not be good news for borrowers as the Bank of England is likely to continue its program of interest rate increases in order to bring inflation to its 2% target. The bank's chief economist warned that inflation may prove to be more persistent in the UK than in other countries.

Chancellor Jeremy Hunt commented on the announcement, saying that high inflation is a problem for families and businesses and that the government has a plan to reduce it. The Confederation of British Industry (CBI) also noted that while inflation may be easing, the pressures on households will remain high in the short-term.

FAQs:

1. How much has inflation fallen in the UK?
   It has eased to 10.5% in December vs 10.7% in the previous month.
2. What is the highest-recorded inflation rate in the UK?
   11.1%