UK inflation slows but remains in double digits

Inflation in the UK slowed in December but remained in double digits despite interest rate hikes and a slowdown in economic activity. Inflation in the UK continued to fall for a second month but still remained in double digits. According to the UK Statistics Office, annual inflation fell to 10.5 percent in December. Inflation had been 10.7 percent the previous month and peaked at 11.1 percent in October. This slowdown indicated that the worst cost of living crisis in a long time was starting to ease. While fuel and clothing prices were effective in the slowdown, there were increases in food, restaurant and hotel prices. Core inflation remained unchanged at 6.3 percent annually. Despite this slowdown, inflation is still well above the Central Bank's target of 2 percent. The country's Central Bank has increased interest rates nine times in a row since December 2021. The bank is expected to raise its policy rate by 50 basis points to 4 percent next month. Investors predict that the final interest rate will be around 4.5 percent by mid-year.