Published On: Wed, Jan 18th, 2023

Inflation rate in the UK drops slightly to 10.5 percent | Personal Finance | Finance


These latest figures are from December 2022 and could suggest inflation in the country may have reached its peak. Recently, figures from the Office for National Statistics (ONS) showed that wages had grown at their fastest pace in 20 years between September and November 2022.

However, real term pay was revealed to have failed to keep pace with the inflation-hiked prices of goods and services over the period. Households have struggled to manage the financial pressures which have only worsened from the UK’s record high inflation rate.

Chancellor of the Exchequer, Jeremy Hunt, said: “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.

“While any fall in inflation is welcome, we have a plan to go further and halve inflation this year, reduce debt, and grow the economy – but it is vital that we take the difficult decisions needed and see the plan through.

“To help families in the meantime, we are providing an average of £3,500 of support for every household over this year and next.”

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Along with rising energy bills, the high CPI inflation rate has been one of the main contributors to the UK’s cost of living woes.

Last year, the rate of inflation reached a staggering 41-year high of 11.1 percent as the economy struggled to get on its feet post-Covid.

In light of this, the Bank of England has raised the UK’s base rate numerous times in an attempt to rein in inflation.

Currently, the base rate is at 3.5 percent which has prompted interest rates for savers to go up but also the rate of repayments for mortgages and debt rise too.

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One of the main factors leading to this drop in the inflation rate has been the knock-on effect of falling petrol prices.

According to the ONS, the largest downward contribution to the change in both the CPIH and CPI annual inflation rates between November and December 2022 were from transport, particularly motor fuels.

Furthermore, there was a decrease in the price of clothing and footwear, as well as recreation and culture, over the period.

Despite this, there was still an increase in prices for restaurants and hotels, and food and non-alcoholic beverages.

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More to follow…





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