UK inflation rose for the first time in five months in December, complicating the outlook for interest rates ahead of the Bank of England’s next policy decision.
Data published by the Office for National Statistics showed the consumer prices index increased to 3.4% in December from 3.2% in November, a sharper rise than economists had expected. Prices increased by 0.4% over the month.
Alcohol and tobacco, alongside transport, made the largest upward contributions to the monthly increase in inflation. City forecasts had pointed to a more modest rise to 3.3%.
Grant Fitzner, chief economist at the ONS, said: “Inflation ticked up a little in December, driven partly by higher tobacco prices, following recently introduced excise duty increases.”
“Airfares also contributed to the increase with prices rising more than a year ago, likely because of the timing of return…
