U.K. inflation continued to decline in December as gasoline prices moderated, but price growth remained at double-digits despite rapidly rising interest rates and slowing economic activity.
U.K. consumer prices rose 10.5% on year in December, down from the 10.7% increase recorded in November, data from the Office for National Statistics showed Wednesday.
This matches the consensus forecast from economists polled by The Wall Street Journal.
December’s decline is the second in as many months after inflation reached a 41-year-high of 11.1% in October.
Lower gasoline and clothing prices contributed to the annual easing in inflation, the ONS said. These declines were partially offset by rising prices in restaurants and hotels as well as higher food prices.
Core consumer prices–a measure that excludes the volatile categories of food and energy–were 6.3% higher in December than a year earlier, the same rate as in November.
Economists expect the current inflation surge to have peaked and see price growth moderating further in the coming months, barring another energy-price shock.
Still, the Bank of England is expected to continue to raise interest rates from the current 3.5% as the U.K. economy performed better than previously expected at year-end and the labor market remains tight.
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