UK inflation unexpectedly dipped in December for the first time in three months as hotel prices fell and tobacco costs eased. 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 rates 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.
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