Headline UK inflation climbed higher in December due to extra duties and rebounding airfares, but underlying measures remained unchanged.
The consumer price index in December was up 3.4% compared to a year ago, the Office for National Statistics revealed, rising from 3.2% in November. This was higher than the 3.3% the economists expected.
On a monthly basis, CPI was up 0.4%, as expected, having fallen 0.2% in November.
Core CPI, which excludes fuel, food and other volatile prices, remained at 3.2%, while services CPI rose to 4.5% from 4.4%, below the 4.6% consensus forecast.
"Inflation ticked up a little in December, driven partly by higher tobacco prices, following recently introduced excise duty increases," said ONS chief economist Grant Fitzner.
"Airfares also contributed to the increase, with prices rising more than a year ago, likely because of the timing of return flights over the Christmas and New Year period. Rising food costs, particularly for bread and cereals, were also an upward driver.
Softer housing rents and lower prices for various recreational events were a partial offsetting factor.
Fitzner said increases in the prices for goods leaving factories were unchanged compared to November, while the increase in the cost of raw materials for business slowed, driven by lower crude oil prices.
Thomas Pugh, chief economist at RSM UK, said the 3.4% headline rate of CPI was slightly below the Bank of England forecast for December, "but that won’t be enough to tempt the MPC into cutting interest rates again next month".
He thinks the Bank's monetary policy committee will want to sit on their hands until April, as he and many others expect inflation to take a step down to 3% in January and drop to around 2% in the second quarter as positive base effects feed in and policy measures announced in the last budget to lower energy prices take effect.
"However, given almost all the survey measures of prices suggest disinflation has slowed, the MPC will be cautious this year, even as headline inflation drops. That means the cut we expect in April may well be the last one this year."
The major risk to the inflation outlook comes from geopolitics, he added, with the price of oil is up almost 10% so far this year due to events in the Middle East, "while the prospect of the UK and Europe imposing their own tariffs on the US if US tariffs over Greenland go ahead would risk goods inflation going significantly higher than we currently expect".