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January 21, 2026
British Pounds traded at 1.3427 against USD at 9:00 AM PST
U.K. inflation accelerated in December on airfares and tobacco prices, but slowed to the 2% target as the impact of utility price hikes dropped out of annual comparisons. The CPI posted an annual growth rate of 3.4% in December, following a 3.2% increase in November. Monthly, consumer prices gained 0.4%, reversing a 0.2% fall in November.
However, excluding energy, food, alcohol, and tobacco, core inflation remained unchanged at 3.2% in December. This was the joint-lowest rate since December 2024. Alcohol, tobacco, restaurants, hotels, and transport led to the upward contributions to the annual inflation.
Separately, input price inflation softened to 0.8% in December from 1.1% in November. At the same time, output price inflation held steady at 3.4%. Monthly, input prices dropped 0.2%, in contrast to the 0.5% increase a month ago. Output prices remained flat after November's 0.1% gain. Average house prices increased by 2.5% yearly in November following a 1.9% rise in October.
Last year, the Bank of England reduced its interest rates four times and signaled reductions this year. In December, the bank lowered the rate by 25 basis points to 3.75%. 01/21/2026 - 05:43:00 (RTTNews)
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