UK CPI inflation rose +0.4% MoM (vs +0.4% MoM expected) and +3.4% YoY (vs +3.3% YoY expected) in December 2025, showing a mild reacceleration in headline prices.

• Headline CPI accelerated to +3.4% YoY (Nov: +3.2%), while the monthly rise was +0.4% (Dec 2024: +0.3%), pointing to slightly firmer inflation momentum versus last month and last year’s comparison.

• Core CPI (ex energy, food, alcohol and tobacco) held at +3.2% YoY for a second month, matching the joint-lowest rate since December 2024 and signaling stable underlying inflation.

• Services inflation ticked up to +4.5% YoY (Nov: +4.4%) while goods inflation edged up to +2.2% YoY (Nov: +2.1%), showing a small firming across both major components.

• Alcohol and tobacco inflation rose to +5.2% YoY (Nov: +4.0%) and +1.0% MoM (Dec 2024: -0.2%), with the increase linked to tobacco duty timing effects that lifted monthly tobacco prices in December.

• Transport inflation increased to +4.0% YoY (Nov: +3.7%) and +1.3% MoM (Dec 2024: +1.0%), driven primarily by air fares (+28.6% MoM) which were noted as sensitive to calendar timing and holiday travel patterns.

• Food and non-alcoholic beverages inflation rose to +4.5% YoY (Nov: +4.2%) and +0.8% MoM (Dec 2024: +0.5%), with upward effects from bread and cereals (+0.03 ppt contribution), vegetables including potatoes (+0.01 ppt), and other food products (+0.01 ppt).

• Housing and household services inflation eased to +4.6% YoY (Nov: +4.8%) alongside +0.2% MoM (Dec 2024: +0.4%), reflecting slower owner occupiers’ housing costs (+4.2% YoY vs +4.5%) which have decelerated for 11 consecutive months.