Although inflation in the UK has eased slightly to 2.5%, households are still facing a surge in rising costs. While the peak of the energy-led cost of living crisis is behind us, prices are still generally increasing. Factors contributing to this include anticipated tax hikes on businesses, potential price increases in various sectors like retail and banking, and global economic uncertainties.
The rate of inflation may have eased slightly but it is clear that UK households are facing a surge of rising costs ahead. At an annual rate of 2.5%, the consumer prices index measure of inflation for the 12 months to December is well below the energy-led cost of living crisis peak above 11%. While that is obviously a relief, prices are still generally rising - just not as quickly.
Sterling is currently 12 cents down on where it stood against the dollar at the end of September while it is more than two cents down on the euro. The divergence in the falls tells you that the bulk of the pound's problems are more tied to dollar strength than pound weakness. It can be explained by the fact that investors are worried about the impact of universal trade tariffs threatened by Mr Trump pushing up domestic inflation in the US.
INFLATION UK ECONOMY COST OF LIVING TAXES INTEREST RATES
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