Consumer prices in the U.K. increased 5.4% in December compared with a year earlier, strengthening the case for further interest-rate rises as the country’s economy emerges from the Omicron wave
LONDON—Consumer prices in the U.K. rose at the fastest annual rate in nearly three decades last month, strengthening the case for further increases in the Bank of England’s key interest rate as the country’s economy emerges from the Omicron wave.since the start of the pandemic, as the U.K. battles a rise in prices due to supply-chain snarls and higher energy prices.
Consumer prices in the U.K. rose 5.4% in December compared with a year earlier, the Office for National Statistics said Wednesday—the biggest annual jump since March 1992. Economists polled by The Wall Street Journal had expected prices to rise by an annual 5.2%, following a 5.1% increase in November.
After that, economists are expecting inflation to fall back as the global economy recovers and supply-chain kinks work themselves out. “Today’s numbers coupled with strong labour market data suggest that a bank rate rise on 3 February is virtually nailed on,” said Philip Shaw, chief economist at Investec Securities, predicting an increase of 0.25 percentage point.What is your outlook on the British economy for the next quarter? Join the conversation below.
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