UK inflation dipped in December for the first time in three months, according to the latest figures from the Office of National Statistics,

Prices rose 2.5% in the year to December, down from 2.6% the month before.

At 2.5% the latest figure is closer to the Bank’s 2% target which it touched briefly in September 2024. But with markets jittery right now, this slight drop in inflation doesn’t necessarily equate to a drop in the Bank base rate come February.

Also notable in ONS latest figures, Consumer Prices Index including owner occupiers’ housing costs (CPIH) rose by 3.5% in the 12 months to December 2024, unchanged from November.

On a monthly basis, CPIH rose by 0.3% in December 2024, down from 0.4% in December 2023.

The owner occupiers’ housing costs (OOH) component of CPIH rose by 8.0% in the 12 months to December 2024, up from 7.8% in the 12 months to November.

This is the highest annual rate since February 1992 in the constructed historical series. OOH costs rose by 0.6% on the month, compared with a 0.4% increase a year earlier.