The consumer price index eased to 3% last month from a five-year high of 3.1% in November, raising the prospect that inflation may have peaked, easing some of the pressure on United Kingdom consumers.
Inflation in the United Kingdom fell to 3% in December 2017, down from November's 6-year high of 3.1%.
The percentage change in the average composite CPI for the 12-month period ending in December 2017 over the average of the CPI for the previous 12-month period was 16.50 percent, showing 0.26 percent point lower from 16.76 percent recorded in November 2017.
'As a result, food CPI inflation probably edged down to 4% in December, from 4.1% in November, shaving 0.01pp off the headline rate.
Despite the recent increase in the price of some items, annual average inflation closed the year at between 3 percent and 5 percent, in line with the Reserve Bank of Zimbabwe (RBZ)'s 2017 year end inflation projections.
Lastly, the wholesale price index advanced 1.8 percent y/y in December, but slower than November's 3.3 percent increase, the weakest increase since November 2016. But growth this year could still see the economy expand faster than its sustainable long-term trend, creating inflation pressures.
Another report from ONS showed that output price inflation accelerated to 3.3 percent in December from 3.1 percent in November.
Investors have increasingly shied away from the U.S. dollar in recent months as monetary tightening is no longer seen as the sole realm of the Federal Reserve.
While the ONS said it was too early to tell if inflation has peaked at 3.1%, Hargreaves Lansdown's senior economist Ben Brettell, is expecting the rate to fall in the next year.
"To put it differently, economic growth of around 1.5 to 2.0 percent year-on-year may, as over the last year, be enough to tighten the labour market significantly further", he said.
The marked increase in CPI inflation in 2017 was mainly due to energy prices.
CPI hit 3.1 per cent in November, prompting Bank of England governor Mark Carney to write to the Treasury, explaining the rise.
"Still remaining well above the Bank's 2% target, another interest rate rise is not off the table". "Against this backdrop, our expectation is for inflation to fall back to the 2% target over the coming months". "The easing of inflation is a positive sign and continued efforts of government to strengthen food supply mechanism can help in bringing down food inflation further", said FICCI President Rashesh Shah.
In food inflation category in December 2017, food inflation on a year-on-year basis was highest in Kwara (24.46%), Nasarawa (22.77%) and Yobe (22.60%), while Kogi, Bauchi and Benue recorded the slowest rise in food inflation.