The UK inflation rate rose slightly to 4.0%, in December 2023, up from 3.9% in November.

This 0.1% increment marks the first increase in the Consumer Prices Index (CPI) rate since February 2023, while monthly growth in December also stood at 0.4%, consistent with the same time last year.

The CPI including owner occupiers' housing costs (CPIH) maintained its annual inflation rate at 4.2%, mirroring November's figure. This steadiness was also seen on a monthly basis, with a 0.4% increase, identical to the rate in December 2022.

The alcohol and tobacco sectors put significant upward pressure on both the CPIH and CPI annual rates. Conversely, food and non-alcoholic beverages exerted the greatest downward pressure.

Commenting on the data, Martin McTague, national chair of the Federation of Small Businesses (FSB), said:

"Seeing inflation inch up marks a disappointing start to 2024. It was a challenging end to last year, and now businesses are bracing themselves for more difficulties that lie ahead.

"The lowering of the consumer energy price cap last October provided a temporary respite for householders. Importantly, business tariffs fall outside this cap, leaving many battling with heightened utility bills."

Dr. Roger Barker, director of policy at the Institute of Directors, said:

"After nine straight months of monthly declines, December's increase in the headline inflation rate was an unwelcome surprise. Inflation may give us a slightly bumpy ride during the next couple of months. Next month's figure will have to incorporate a 5% rise in the Ofgem utility price cap from 1 January, and could also therefore tick upwards.

"However, inflation in the economy is still broadly moving in the right direction. We still believe that the Bank of England should consider a cut to interest rates sooner rather than later in order to provide a boost to depressed levels of business confidence."

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