UK inflation dips slightly to 10.5% — second drop in two months

By Abubakar Yunus Abuja

The United Kingdom’s inflation rate dropped slightly to 10.5 percent in December 2022.

This is the second time inflation would be declining in two months, despite forecasts of a recession in the country.

In November, inflation rate fell slightly to 10.7 percent from the 41-year high of 11.1 percent in October.

UK’s Office for National Statistics (ONS), said the drop in diesel prices in the country contributed to the ease.

It further said the largest upward contributors are housing and household services (electricity, gas, and other fuels) and food and non-alcoholic beverages.

ONS added that the largest downward contribution to the change came from transport (particularly motor fuels), clothing and footwear, and recreation and culture, with rising prices in restaurants and hotels.

Meanwhile, food and non-alcoholic beverage prices, making the largest (partially offsetting) upward contributions, rose by 16.9 percent in the 12 months to December — slightly up from 16.5 percent in November.

Speaking on the inflationary movement in the country, Grant Fitzner, ONS chief economist said: “Inflation eased slightly in December, although still at a very high level, with overall prices rising strongly during the last year as a whole.”

“Prices at the pump fell notably in December, with the cost of clothing also dropping back slightly.

“However, this was offset by increases for coach and airfares as well as overnight hotel accommodation. Food costs continue to spike, with prices also rising in shops, cafes, and restaurants.”

Meanwhile, last year, the Bank of England (BoE) increased the interest rate to 3 percent amid projections of “a prolonged period” of recession in the country.