1 of 3 | Jeremy Hunt, the British treasury secretary, said a decline in energy prices helped ease some of the inflationary pressures in the economy, though inflation remains about twice as high as at the start of 2022. File photo by Hugo Philpott/UPI. |
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Jan. 18 (UPI) -- Like other major economies, the British government said Wednesday that lower energy costs dampened inflationary pressures, though consumer prices are still 10.5% higher than year-ago levels.
The Office for National Statistics said the month-on-month inflation cooled slightly from November levels of 9.3% to 9.2% in December. Year-on-year inflation is following suit, falling from 11.1% in October, it's high point for 2022, to 10.5% for the 12-month period ending in December.
"The easing in the annual inflation rate in December 2022 principally reflected price changes in the transport division, particularly for motor fuels," the ONS stated. "There were also downward effects from clothing and footwear, and recreation and culture."
Much of the region was profoundly impacted last year by a geopolitical premium emanating from the war in Ukraine as economies of scale searched frantically for non-Russian supplies of everything from crude oil and natural gas to grains.
When British inflation peaked in October, the price for Brent crude oil, the global benchmark for the price of oil, was trading in the low $90 per barrel range, but it ended the year closer to the $80 level.
Jeremy Hunt, the British treasury secretary, said he fears that energy prices, however, will remain high for "some time," but economists are working to insulate the domestic sector from global events.
"We are investing a lot of money in renewable and nuclear power so that our energy prices aren't at the whim of international markets," he said.
Hunt added, however, that companies may continue to pass that added cost of transportation to consumers, though some of the bottlenecks that gripped the global economy for much of the COVID-19 pandemic are easing some of the strains.
Fuel prices increased by 11.5% over the 12-month period ending in December, down from 17.2% to November.
In general, Hunt said British policymakers have a target of 2% inflation, but are focused on the short-term on halving that from current levels.
The British economy has fumbled since exiting the European Union in 2020. Last year saw Liz Truss resign after just 45 days in office as prime minister after her tax cut plan led to the devaluation of the British currency.
Inflation in the British economy started 2022 closer to 5.5%.
