The UK inflation rate once again surprised the market by recording a higher -than -expected increase in December.
According to the Office for National Statistics (ONS), the UK consumer price index (CPI) jumped to a nearly 30 -year high last month with a record of 5.4% from 5.1% in November. The figure recorded was also better than expected to rise 5.2%.
This is the highest reading ever recorded since March 1992, which was largely driven by rising food and beverage costs; restaurants and hotels; furniture and household items; as well as clothing and footwear.
Meanwhile, core inflation (excluding food and energy prices) rose to 4.2% from 4.0% previously, and exceeded market forecasts for an increase of 3.9%.
This latest recorded surge is likely to shake the policy approach of the Bank of England (BOE) once again, which has previously acted to raise its interest rates in the past month.
The initial reaction exhibited by the pound was unfortunately not as aggressive as expected, showing the currency traded little changed at around the price of 1.3600 against the strong USD.
