UK inflation drops to 2.5% as rate of price rises slow

UK inflation marginally fell in the year to December but remained stubbornly above the 2% target.

Consumer Prices Index (CPI) inflation rose to 2.5% in the 12 months to December, down from 2.6% the previous month, the Office for National Statistics (ONS) has said.

Economists anticipate a "temporary reprieve" before price rises pick up pace this year.

Grant Fitzner, chief economist at ONS, said: "Inflation eased very slightly as hotel prices dipped this month but rose a year ago. The cost of tobacco was another downward driver, as prices increased by less than this time last year."

He added: "This was partly offset by the cost of fuel and also second-hand cars, which saw their first annual growth since July 2023."

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