UK inflation rate falls slightly to 3 per cent

The UK's inflation rate fell to three per cent today from November's six-year high of 3.1, the Office for National Statistics said.

According to the Consumer Prices Index latest figures, published on Tuesday, the UK’s soaring inflation has rolled back from a near six-year high, dipping for the first time since June.

Prices are still rising faster than wages, which grew by 2.3 per cent in the last year.

It comes after the second largest construction company in the UK, Carillion, went bust on Monday, putting 20,000 jobs at risk.

The Office for National Statistics said the downward effect on inflation was mainly due to air fares along with a fall in prices of recreational goods including games and toys.

The downward contributions were partly offset by an increase in tobacco prices following the Autumn Budget’s duty increase as well as a rise in petrol and diesel prices.

According to leading economists, today’s figures suggest the UK’s inflation rate may have now peaked following sterling's collapse in the wake of the Brexit vote.

British consumers have been searching for a reprieve after taking a double-whammy hit from a Brexit-fuelled jump in the cost of living and paltry wage growth.

But despite the dip in inflation, the cost of food, household goods and transport means the cost of living has risen.

Everyday prices still rose more rapidly across the UK as a whole in 2017 than in France, Germany and the wider European Union.

Sterling slipped against the US dollar following the announcement, falling 0.2 per cent to 1.37. Against the euro, the pound was broadly flat at 1.12.