Skip navigation

Gloucestershire Business News

Surprise drop in inflation rate

UK inflation unexpectedly dipped in December for the first time in three months.

Easing price rises in restaurants and falling hotel prices last month helped the overall inflation rate come down, as did a slowing in tobacco, clothing, and footwear inflation, the BBC reported.

Prices rose 2.5% in the year to December, down from 2.6% the month before, the Office for National Statistics (ONS) said.

Despite the rate of price rises remaining above the Bank of England's target, expectations of an interest rate cut next month have grown.

The latest figures also ease pressure on Chancellor Rachel Reeves who has faced criticism following a slump in the value of the pound and government borrowing costs hitting the highest level for several years.

UK borrowing costs eased early today (Wednesday) and the pound rose slightly to stand at $1.22 as traders reacted to the unexpected inflation fall.

Reacting to the latest inflation data released this morning, Stuart Morrison, research manager at the British Chambers of Commerce, said: "Today's slight dip in the inflation rate is welcome but it's not a game-changer.

"Underlying price pressures within the economy are clear following the Budget. The path ahead on interest rates this year is likely to remain slow and cautious.

"As our research clearly shows, firms are having to make difficult decisions to manage the upcoming rises in national insurance contributions and the minimum wage. Our latest survey shows most firms expect to raise their prices in the next three months, while business confidence has dipped to 2022 levels. Labour cost pressures have grown significantly and are particularly acute in the hospitality sector.

"We need quick government action to ease the cost pressures companies are facing and create new opportunities for investment. Ministers should focus on accelerating business rates reform, giving infrastructure projects the green light and boosting exports."

Related Articles

BUDGET: Devolution uncertainty left Cheltenham chiefs struggling Image

BUDGET: Devolution uncertainty left Cheltenham chiefs struggling

The £19.05m proposals are due to be considered this week

Looming NI changes prompt plans to increase redundancies Image

Looming NI changes prompt plans to increase redundancies

Latest data highlights urgent need for Government to provide business support.

Homecoming for new council chief executive Image

Homecoming for new council chief executive

Jo Walker has been appointed as the new chief executive of Gloucestershire County Council.

Safran boss reflects on 'remarkable' year Image

Safran boss reflects on 'remarkable' year

Record levels reached for revenues, profits and free cash flow.

Copyright 2025 Moose Partnership Ltd. All rights reserved. Reproduction of any content is strictly forbidden without prior permission.