Pros and cons of inflation

Prices are still going up markedly, but a dose of inflation is not always bad for the economy

Bank of England
The Bank of England has yet to indicate when it may cut interest rates
(Image credit: Mike Kemp/In Pictures via Getty Images)

The UK has experienced a surprise rise in inflation, due mainly to higher prices for tobacco and alcohol. 

In the first increase in 10 months, inflation was at 4% in December, a slight rise on the November figure of 3.9% but one that is "complicating the timing of interest rate cuts" by the Bank of England, said The Guardian. Inflation, though, was still "on track to drop below the Bank’s 2% target by the spring".

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