Inflation in United Kingdom

United Kingdom Inflation | Economic News & Forecasts

United Kingdom - Inflation

Inflation comes in at highest level since March 1992 in December

Consumer prices increased 0.50% over the previous month in December, slowing down from the 0.74% increase seen in November. December's result marked the weakest reading since September. The moderation was broad-based, with reduced price pressures recorded for recreation and culture, transportation, and housing and utilities.

Inflation edged up to 5.4% in December, following November’s 5.1%, representing the highest inflation rate since March 1992 and coming in above market expectations. A combination of Brexit-related and international supply-side pressures and high energy prices have spurred inflation in recent months. Meanwhile, the trend pointed up, with annual average inflation coming in at 2.6% in December (November: 2.2%). Finally, core inflation ticked up to 4.2% in December, from the previous month's 4.0%.

Together with recent solid labor market data, the December inflation reading tilts the balance of risks towards a faster pace of rate hikes by the Bank of England—with the next increase potentially as soon as the next meeting in February.

FocusEconomics Consensus Forecast panelists expect inflation to average 3.9% in 2022, which is up 0.7 percentage points from last month’s forecast, and 2.2% in 2023.

United Kingdom - Inflation Data

2015   2016   2017   2018   2019  
Inflation Rate (CPI, annual variation in %)0.0  0.7  2.7  2.5  1.8  

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United Kingdom Inflation Chart

United Kingdom Inflation
Note: Annual variation of consumer price index (CPI) in %.
Source: Office for National Statistics (ONS).

United Kingdom Facts

Value Change Date
Bond Yield0.83-3.04 %Jan 01
Exchange Rate1.33-0.35 %Jan 01

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