The annual rate of inflation slowed slightly on November but remains in double figures, the ONS has revealed following the publication of its December 2022 Consumer Price Index (CPI)
Analysis of prices for a range of consumer products shows that goods cost on average 10.5% more in December 2022 than in December 2021, down from 10.7% in the previous month. December marks the second consecutive month of decline in the rate of inflation from October’s 40-year-high, but remains well above the Bank of England’s 2% target.
The easing in the rate of inflation in December was largely due to continued decline in fuel prices, with prices at the pump at their lowest since February 2022 for petrol, and April 2022 for diesel. Rising oil and gas prices at the start of 2022 was a key trigger for rising inflation and energy costs, with supplies restricted due to Russian sanctions following the invasion of Ukraine.
Among the biggest risers however were food and drink prices, both at supermarkets and in the hospitality sector, which recorded annual increases of 16.9% and 11.4% respectively.
Prices for basic staples, including milk, cheese and eggs saw some of the biggest rises, up 4.1% on the previous month, with the price of skimmed milk up 46% year-on-year. Analysis by consumer rights group, Which? has also found that budget and own-label ranges at supermarkets had seen steeper price rises than premium and branded counterparts.
Following the latest inflation figures, the Bank of England will be expected to raise interest rates further when its Monetary Policy Committee next meets on 2nd February. The Chancellor of the Exchequer, Jeremy Hunt, has also restated a government pledge to see inflation halved by the end of the 2023.