The latest report from the Office for National Statistics, released on Wednesday, reveals that UK consumer price inflation moderated unexpectedly in December.
The consumer price index (CPI) recorded an annual increase of 2.5 percent for the month of December, down from a 2.6 percent rise in November, contrary to expectations of the rate holding steady at 2.6 percent.
On a month-to-month basis, the CPI increased by 0.3 percent, following a 0.1 percent rise in November, falling short of the anticipated 0.4 percent increase.
When excluding volatile categories such as energy, food, alcohol, and tobacco, core inflation softened to 3.2 percent in December from 3.5 percent in November, not meeting economists' forecast of 3.4 percent.
Within the inflation components, goods inflation climbed to 0.7 percent from 0.4 percent, while the annual rate for services decreased to 4.4 percent from 5.0 percent.
Further data from the ONS highlighted a continued drop in input prices for the fifth consecutive month in December, with input prices declining by 1.5 percent year-on-year, following a 2.1 percent fall.
Conversely, factory gate prices, after declining for three months, inched up by 0.1 percent, having previously fallen by 0.5 percent in November.
Monthly dynamics showed that input prices edged up by 0.1 percent, compared to no growth in November, and output prices mirrored this trend, also rising by 0.1 percent after a 0.4 percent gain in November.
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