Inflation in the United Kingdom (U.K.) declined to 10.5% in December as prices for fuel, clothing and recreation costs moved lower.
December’s inflation reading was down from 10.7% in November, the British Office for National Statistics reported.
Economists surveyed by the Reuters News Agency had forecast that the British Consumer Price Index (CPI) would drop to 10.5% in December.
Inflation in the U.K. peaked at a 41-year-high of 11.1% in October of last year.
Core inflation, which excludes volatile food and energy prices, held steady in December at 6.3%.
The statistics agency said the largest downward pressure on inflation in December came from transportation, clothing, and recreation costs. Energy costs also dipped slightly during the month.
Declines in those areas offset continued price increases in housing, food and non-alcoholic beverages.
The Bank of England raised its benchmark interest rate by 50-basis points to 3.50% on December 15, 2022. Economists forecast a further rise in interest rates to 4% when the central bank next meets on February 2.
The U.K. has been roiled by a wave of labour action in recent months, with teachers, railway staff, civil servants and nurses going on strike.
The British government has introduced anti-strike legislation that mandates minimum service levels across the U.K.
