UK inflation declines to lowest level in 3 months at 10.5%

UK inflation fell back for the second consecutive month to reach 10.5 percent in December compared to10.7 percent in November, while food and drink prices continued to rise at their fastest pace since 1977.

The Consumer Prices Index including owner occupiers’ housing costs (CPIH) increased by 9.2 percent in the 12 months to December 2022, down from 9.3 percent in November and 9.6 percent in October.

“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,” the chancellor, Jeremy Hunt, said.

The price of some basics, including bread and cereals, increased in December, but at a slower rate compared with the previous month, while clothing fell 0.05 percent month on month.

On the other hand, the price of milk, cheese and eggs jumped by 4.1 percent between November and December, compared with a smaller rise of 1.5 percent between the same period in 2021.

The main drivers of the annual inflation rate for CPIH and CPI are the same where they are common to both measures.

However, the owner occupiers’ housing costs (OOH) component accounts for around 17 percent of the CPIH and is the main driver for differences between the CPIH and CPI inflation rates.