UK Inflation Rate Rises to 3.4% in December, Exceeding Expectations

Reuters Yonhap News

The UK Office for National Statistics announced on January 21, 2026 (local time) that the Consumer Price Index (CPI) for December of last year rose by 3.4% compared to the same month a year earlier.

This figure is higher than the previous month's 3.2% and also exceeds the average expert forecast of 3.3%. It marks the first time in five months, since July of last year, that the consumer price inflation rate has increased from the previous month.

The rate of increase in service prices, which the Bank of England (BOE) closely monitors, also rose to 4.5%, up from 4.4% the previous month.

Tobacco and airfares contributed the most to last month's price increases. As items such as tobacco and airfares are highly volatile, experts believe that the pace of inflation will slow in the coming months. Andrew Bailey, Governor of the BOE, predicted that inflation would approach the target rate of 2% around April or May.

There is still a prevailing expectation that the BOE will keep the key interest rate unchanged at the Monetary Policy Committee meeting scheduled for February 5.

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