United Kingdom Inflation Rate

Annual inflation rate in the UK fell to 10.5% in December of 2022 from 10.7% in November, matching market forecasts. It marks a second consecutive month of slowing inflation and the lowest rate in three months, after a peak of 11.1% in October. The largest downward contribution came from transport prices (6.5% vs 7.2%), namely motor fuels. Average petrol prices fell by 8.3 pence per litre between November and December. Prices also eased for clothing and footwear (6.5% vs 7.5%) and recreation and culture (4.9% vs 5.3%), mainly games, toys and hobbies. On the other hand, prices rose faster for restaurants and hotels (11.3%, the largest since 1991 vs 10.2%), particularly accommodation, and food and non-alcoholic beverages (16.8%, which is the highest since 1977 according to modelled estimates vs 16.4%). Compared to the previous month, the CPI increased 0.4%, the same as in November and also in line with forecasts.