UK consumer price inflation 10.5% in December: ONS By Reuters

© Reuters. FILE PHOTO: A woman shops at a Sainsbury’s supermarket, amid the spread of the coronavirus disease (COVID-19), in London, Britain January 11, 2021. REUTERS/Hannah McKay/File Photo

LONDON (Reuters) – British consumer price inflation fell to 10.5% in December from November’s 10.7%, figures from the Office for National Statistics showed on Wednesday.

Economists polled by Reuters had forecast that Britain’s annual CPI rate would drop to 10.5% in December, moving further away from October’s 41-year high of 11.1%.

Core CPI – which excludes energy, food, alcohol and tobacco – was unchanged at 6.3% in December.

The Bank of England forecast in November that headline CPI would drop to around 5% by the end of 2023 as energy prices stabilised, but policymakers have warned of ongoing upward pressure on inflation from a tight job market and other factors.

Financial markets expect the BoE to raise its main interest rate to 4% from 3.5% on Feb. 2, when it will also publish a quarterly update to its growth and inflation forecasts.