United Kingdom inflation fell back to three per cent last month

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Commenting on the ONS figures Paul Hollingsworth, senior United Kingdom economist at Capital Economics, said: "The fall-back in CPI inflation from 3.1% in November to 3% in December marks the beginning of what we expect will be a sustained downward trend over the course of this year".

Consumer price inflation for the rural areas stood at 5.27 per cent in December 2017 against 4.7 per cent in November and 3.83 per cent in December 2016.

A drop in the UK's inflation rate in December suggests the post-Brexit hit to living standards may finally be easing.

"Still remaining well above the Bank's 2% target, another interest rate rise is not off the table".

On a year-on-year (YoY) basis, the CPI inflation last month was higher than the 3.41 per cent recorded in December 2016.

Earlier this month, Finance Minister had told Parliament that the inflation had increased owing to a seasonal rise in vegetable prices and the higher house rent allowances disbursed to government employees under the 7th Pay Commission recommendations.

Core inflation that excludes energy, food, alcoholic beverages and tobacco, slowed to 2.5 percent in December from 2.7 percent in November.

Mumbai: With the latest inflation prints moving up, the Reserve Bank is likely to raise its inflation forecast for March and may leave the key rates unchanged in the upcoming policy review next month, says a report.

The slight fall in the annual rate of inflation was due to lower food and fuel prices and less pressure on transport costs, the ONS reported.

Compared with November previous year, outstanding price falls in last month included fresh vegetables, down by 6.4 percent; culture and entertainment, down by 1.3 percent; and furniture and household equipment, down by 1.1 percent.

"Inflation has been running at roughly the same rate since last spring following significant increases, partly due to the weaker pound after the European referendum", said James Tucker, the statistics agency's senior statistician. "These downward contributions were partially offset by prices for motor fuel, which increased between November and December 2017, having fallen a year ago".

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