Annual inflation rose to 3.4% in December, up from 3.2% the month before, the Office for National Statistics found.
This was a larger jump than expected by economists, though few are overreacting to the news.
Michael Saunders, senior adviser at the consultancy Oxford Economics, dismissed the December rise as “not the start of a new upward trend”, adding that it reflects “a variety of fairly temporary erratic factors”.
The UK inflation rate is being driven by rising airfares, food and tobacco.
The Bank last cut its base rate by 0.25% to 3.75% in December 2025, while the next decision is due on February 5 2026.
Chancellor Rachel Reeves said the Bank of England expected an inflation increase, before the rate cools in the spring and summer, bringing it closer to the central bank’s 2% target.
She said: “That continues to be their expectation and that continues to be my expectation, and that’s going to happen because of the measures I took in my budget last year.”
