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The UK’s inflation rate slowed in December, but it might prove to be sticky

The UK Economy Took Some Baby Steps

**Why should I care?**

***Zooming out:*** *Wage worries.*

It seems Brits drove a hard bargain in their annual performance reviews last month, given that December’s wages were over 6% higher than the same time the year before. And while that means inflation’s still overshadowing wage growth for now, that could soon change: plenty of experts predict that food and energy prices will lose their sizzle over the next few months, which would take the wind out of inflation's sails. If that happens, folk will find themselves with some extra cash in their pockets – problem is, any extra consumer spending could stop inflation from falling any further.



***The bigger picture:*** *Everything happens to me.*

Compared to the US and the EU, the UK has the worst of both worlds: a tight labor market like the US, and super-pricey imported energy like the EU. See, while the Americans and Europeans have got *one* hand tied behind their backs, they still have another fist to swing with: the US has enough domestic energy to keep prices low, and the European jobs market isn’t as hot-to-touch as the UK’s, which stops wages swelling. That means poor old Britannia might wind up being the last one to cut inflation down to size.



The **Office of National Statistics** (ONS) reported that UK inflation eased a smidgen in [December](https://www.cnbc.com/2023/01/18/uk-inflation-rate-dips-for-second-straight-month-to-hit-10point5percent.html), with prices climbing 10.5% versus the same time last year.

**What does this mean?**

Anyone searching for silver linings in the UK’s recent economic headlines has probably developed a squint by now – but this time, there really could be a glimmer in the cloud. Sure, inflation still stung Brits last month: food was 17% more expensive, and even “core inflation” – that strips out volatile food and energy prices – was a biting 6.3%. But let’s focus on the positives: December’s inflation was slightly kinder than November’s, and the **Bank of England** believes that trend might be here to stay. The central bank even signaled that last year’s galloping, inflation-busting rate hikes could soon slow down to a leisurely trot.



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encryptedEmail

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slugOrId

ContentPieceQuery

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authorization

content

SingleContentPiece_viewer

webSubscriptions

contentPiece

mostPopularTags

features

query ContentPieceQuery(
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  $encryptedEmail: String
  $planSlug: String
) {
  viewer {
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      roles {
        isAnonymous
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    ...SingleContentPiece_viewer_4uP6yi
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        __typename
        ...SingleContentPiece_contentPiece
        canonicalLink
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    id
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}

fragment AccessibleImage_accessibleImage on AccessibleURLImage {
  full
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}

fragment AdvertWrapper_activeProductAdvert on ProductAdvert {
  id
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  sponsoringCompany {
    name
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}

fragment AnonymousPaywall_viewer_2HyoJ4 on Viewer {
  webSubscriptions {
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}

fragment AudioOnlyBanner_contentPiece on ContentPieceInterface {
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}

fragment AuthorLinkWrapper_author on Author {
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}

fragment Avatar_image on URLImage {
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}

fragment BannerAdvert_activeProductAdvert on ProductAdvert {
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}

fragment Block_block on ContentPieceBlock {
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  ... on ImageBlock {
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}

fragment ContentAuthorAndMetadata_author on Author {
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}

fragment ContentDownloadBlock_authorization on Authorization {
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}

fragment ContentDownloadBlock_contentPiece on ContentPieceInterface {
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}

fragment ContentFooter_contentPiece on ContentPieceInterface {
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}

fragment ContentHeaderDetails_authorization on Authorization {
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fragment ContentHeaderDetails_contentPiece on ContentPieceInterface {
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}

fragment ContentHeader_contentPiece on ContentPieceInterface {
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}

fragment ContentMetadata_contentPiece on ContentPieceInterface {
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}

fragment ContentPieceBookmarkIcon_contentPiece on ContentPiece {
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}

fragment ContentPieceSEO_contentPiece on ContentPieceInterface {
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  subtitle
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}

fragment ContentPieceSponsor_contentPiece on ContentPieceInterface {
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}

fragment DefaultContentHeader_contentPiece on ContentPieceInterface {
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  id
  title
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    ...ServerImage_image
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  author {
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}

fragment DownloadContentDropdownContentPieceRefetch_viewer_1QxYRk on Viewer {
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    __typename
    id
    title
    isAvailableToProducts
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    keyInsightsBlocks {
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}

fragment DownloadContentDropdown_blocks on ContentPieceBlock {
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}

fragment DownloadContentDropdown_contentPiece on ContentPieceInterface {
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}

fragment EvergreenContentHeader_authorization on Authorization {
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    isB2bUser
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fragment EvergreenContentHeader_contentPiece on ContentPieceInterface {
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  hasChapters
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  headerImage {
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}

fragment ImageBlock_block on ImageBlock {
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}

fragment KeyInsightsBlock_contentPiece on ContentPieceInterface {
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}

fragment KeyInsightsCarousel_contentPiece on ContentPieceInterface {
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    id
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}

fragment KeyInsights_contentPiece on ContentPieceInterface {
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}

fragment LicenseContentButton_contentPiece on ContentPieceInterface {
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  title
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}

fragment ListenButton_contentPiece on ContentPieceInterface {
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  readingTime
  isPremium
  hasBlocks
  hasChapters
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  contentPieceType {
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}

fragment LoggedInPaywall_viewer_2HyoJ4 on Viewer {
  webSubscriptions {
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  }
}

fragment MainContentSection_contentPiece on ContentPieceInterface {
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  blocks {
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}

fragment MostPopularTags_tags on GenericTagConnection {
  edges {
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      ... on GeographyTag {
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}

fragment Navigation_authorization on Authorization {
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    isB2bUser
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}

fragment Navigation_tags on GenericTagConnection {
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}

fragment PaywallBanner_contentPieceType on ContentPieceType {
  isAvailableForFreemium
}

fragment PaywallBanner_viewer_2HyoJ4 on Viewer {
  ...AnonymousPaywall_viewer_2HyoJ4
  ...LoggedInPaywall_viewer_2HyoJ4
}

fragment PremiumAccountPromotionPanel_webPaymentPlan_2HyoJ4 on WebPaymentPlan {
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  interval
  promotionApplied(slug: $planSlug) {
    stripeDiscount {
      discountPct
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}

fragment QuoteBlock_block on QuoteBlock {
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}

fragment ServerImage_image on URLImage {
  full
}

fragment SingleContentPiece_authorization on Authorization {
  ...authorization_authorization
  ...ContentHeaderDetails_authorization
  ...ContentDownloadBlock_authorization
  ...EvergreenContentHeader_authorization
  roles {
    isPreviewingContentAllowance
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}

fragment SingleContentPiece_content on Content {
  ...authorization_content
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}

fragment SingleContentPiece_contentPiece on ContentPieceInterface {
  __isContentPieceInterface: __typename
  ...AudioOnlyBanner_contentPiece
  ...authorization_contentPiece
  ...MainContentSection_contentPiece
  globalContentPieceId
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  chapters {
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    slug
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  sponsoringCompany {
    name
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  activeProductAdvert {
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}

fragment SingleContentPiece_viewer_4uP6yi on Viewer {
  ...PaywallBanner_viewer_2HyoJ4
  ...DownloadContentDropdownContentPieceRefetch_viewer_1QxYRk
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  features
}

fragment Tag_tag on GenericTag {
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  ... on ContentTag {
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}

fragment TextBlock_block on TextBlock {
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}

fragment authorization_authorization on Authorization {
  roles {
    isPreviewingContentAllowance
    isPreviewing
    isAnonymous
    hasPremiumSubscription
    isFreemium
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}

fragment authorization_content on Content {
  anonymousUserHasPremium
}

fragment authorization_contentPiece on ContentPieceInterface {
  __isContentPieceInterface: __typename
  isPremium
  contentPieceType {
    isAvailableForFreemium
  }
}


The UK Economy Took Some Baby Steps

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