UK inflation rate dips for the second straight month to hit 10.5%

 U.K. inflation eased on the month, in line with economists’ expectations, as fuel, clothing and recreational costs dragged down the index.

Inflation softened to 10.5% in December, down from the 10.7% of November, the British Office for National Statistics said Wednesday. A panel of economists polled by Reuters had projected the British consumer price index would reach 10.5% in December, down from the 41-year-high of 11.1% achieved in October.

The core CPI, which excludes food, energy, alcohol and tobacco, was steady on the month at 6.3% in December, the ONS found.

The agency said the largest downward contribution came from the transport, clothing and recreation sectors, offsetting hikes in housing and household services, food and non-alcoholic beverages.

Inflation rates have spiked across 2022, fueled by surges in energy prices as Western sanctions bite into access to Russian oil and gas supplies. Policymakers have been combatting rising inflation with a spate of interest rate increases, with British premier Rishi Sunak on Jan. 4 pledging to halve U.K. headline inflation to “ease the cost of living and give people financial security.”

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