This follows a reading of 3.2% in November, which was a fall from the 3.6% measured in October.
From a monthly perspective, the CPI including owner-occupiers’ housing costs (CPIH) increased by 0.4% for December compared to 0.3% in December 2024.
The ONS reported that the CPIH rose by 3.6% in the 12 months to December, a change from 3.5% in November.
Though still above the target of 2%, the downward trajectory that inflation had been on since the end of last year had seemed positive. This latest inflation news also follows the ONS reporting an expansion of the UK economy for November and the Bank of England announcing a base rate cut in December.
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‘Road to recovery remains bumpy’
Ben Thompson, director of home moving strategy at Mortgage Advice Bureau (MAB), said: “Inflation ticking up confirms what many have feared: the journey back to the 2% target is proving to be an uphill climb. While this isn’t necessarily a full reversal of the progress made over the last year, it’s a firm reminder that the road to recovery remains bumpy. Consequently, the Bank of England is likely to keep a steady grip on the tiller, potentially delaying any anticipated rate cuts until the data shows a clearer downward trend once more.
“For prospective buyers, this unexpected uptick forms part of the process. Lenders will continue to offer competitive deals, and while the ‘payment shock’ remains a reality for those remortgaging from historically low rates, the peak of market volatility has clearly been passed – it’s simply that the gap isn’t closing as quickly as we’d hoped.
“In an ever-changing market, this is where expert advice becomes essential. A mortgage broker doesn’t just help you secure the right deal for your needs: they map out the journey with you, navigating the ‘ups and downs’ of the application process with ease. Having an expert in your corner means you can stop trying to second-guess the data and start making decisions based on what actually matters – your home and future.”
