Inflation, which measures the rate of price increases over time, remains above the Bank of England's 2% target.

"We expect headline CPI to get to 2% and even temporarily dip below in April. That should unlock further rate cuts in March and June, earlier than markets expect," says James Smith, Developed Markets Economist at ING. He says the latest rise in UK inflation - from 3.2% to 3.4% in December – shouldn’t last as food prices prove overstated.

The firm notes that while inflation rebounded to 3.4%, it was slightly below their 3.5% forecast. They attribute the increase partly to tobacco duty increases and the unwinding of November’s Black Friday discounts. Despite this uptick, they maintain that inflation will likely fall to the 2.0% target by April due to lower regulated price increases.

Good afternoon, and welcome to our live coverage ahead of tomorrow’s UK inflation data release. The final week before Christmas is a big one for UK macroeconomic news. Today saw the release of labour market figures showing that UK unemployment rose to 5. ...