- Higher rates have helped to squash inflation, but so have easing supply chain pressures
- Shipping disruptions could increase inflation – and delay rate cuts
The UK inflation rate ticked back up to 4 per cent in December – still double the Bank of England’s inflation target. The rise was driven by higher tobacco duties and sticky services inflation, but it only served to cultivate the impression that high inflation won’t go quietly. And shipping disruptions in the Red Sea are only adding to the sense of nervousness.