MNI UK Inflation Insight: December 2024: Air Fares Weigh

• Headline UK CPI came in a bit lower than consensus expected at 2.50%Y/Y (MNI median 2.6%Y/Y, mean 2.61%) but was broadly in line with the BOE’s November MPR forecast which was at 2.46%Y/Y.
• The split was not quite as expected with services CPI coming in notably below expectations at 4.37%Y/Y (MNI median 4.75%, BOE November MPR 4.74%Y/Y).
• But this was almost entirely due to volatile components: air fares, accommodation and cultural services.
• Looking into the detail, we see great risks of reversals from both air fares and accommodation next month.
• We look through the other drivers of the change in inflation.

For the full MNI UK Inflation Insight see: MNI UK Inflation Insight - January 2025 Release.pdf