Inflation remained moderately above the Bank of England's 2% target in December, reflecting ongoing price pressures such as strong wage growth. We expect inflation will stay elevated this year, partly due to Autumn Budget measures contributing to higher prices.
In light of the recent backlash from the financial markets against the UK, it is important to note that alongside international and domestic political uncertainty, sticky inflation is currently contributing to an increase in UK bond yields - and hence up the cost of Government borrowing.
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