After slowing to an eight-month low of 3.2% in November 2025, UK CPI inflation accelerated to 3.4% in December. December’s increase was partly expected, due to rises in tobacco duty and also the price of airfares, which can rise significantly during the holiday period over Christmas. The rise in December, however, was ahead of the 3.3% increase expected by the Bloomberg consensus of analysts beforehand.

However, underlying price pressure indicators suggest that December’s rise in CPI inflation was temporary. Core CPI inflation, which excludes energy, food, alcohol, and tobacco prices, remained stable at 3.2%, below consensus expectations of 3.3%, whilst services inflation rose from 4.4% to 4.5%, below consensus expectations of 4.6%.

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