A customer walks past chilled meats as they shop at a Sainsbury's supermarket in Walthamstow, east London on February 13, 2022. - (Photo by Tolga Akmen / AFP)
LONDON: UK inflation dipped for a second month in December, boosting hopes that the worst cost-of-living crisis in a generation may be starting to ease.
Consumer prices rose 10.5% from a year earlier, the Office for National Statistics (ONS)said yesterday. That’s slower than the 10.7% gain in November and a peak above 11% in October, when domestic energy bills surged.
The data “suggests the peak has now passed” for inflation, said David Bharier, head of research at the British Chambers of Commerce. “But this simply means that prices will stabilise at a much higher level than one year ago.”
Inflation remains five times higher than the government’s 2% target and has touched off a wave of strikes by public sector workers angry their wages are falling short of the pace of price increases.
Prime Minister Rishi Sunak has made halving inflation one of his five key pledges for the year.The figures are the last Bank of England (BoE) officials will see before their next interest rate decision in February. Some economists are starting to talk about an end to the BoE’s tightening cycle, which has delivered the fastest rate rises in three decades.
“Falling inflation will come as a relief to BoE’s policymakers who may see this as an opportunity to slow the pace of further rate rises,” said Yael Selfin, chief economist at KPMG UK.
The pound rose to the day’s high, advancing as much as 0.3% to US$1.23 (RM5.30), reflecting optimism that the UK economy may not be hit as hard as forecasters had previously thought. The headline inflation rate was in line with economist expectations.
Chancellor of the Exchequer Jeremy Hunt said he has more to do to bring down the cost of living.
“High inflation is a nightmare for family budgets, destroys business investment and leads to strike action, so however tough, we need to stick to our plan to bring it down,” Hunt said in a statement. — Bloomberg
