Wed, 21 Jan 2026

Wed, 21 Jan 2026 UK inflation rises for first time in five months - but one-off factors blamed

It is the last set of monthly inflation figures before the next interest rate decision on 5 February.

* UK inflation rose to 3.4% in the year to December, higher than expected and up from 3.2% in November.
* The increase was driven by higher tobacco prices (due to tax rises) and airfares (due to seasonal demand).
* However, analysts say this is not a sign of a long-term trend, but rather a one-off effect due to specific events like Christmas travel and new tax rates.
* Inflation has been higher than in European neighbours such as Germany (2%) and France (0.7%).
* The Bank of England's rate-setting committee will meet on February 5 to decide on interest rates.
* Most economists predict that inflation will fall back down in the coming months, with one forecasting a "big step down" in January.
* Private sector wage growth has slowed to its lowest rate in five years.
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