UK consumer price inflation (CPI)’s headline rate came in at 10.5% for December. This is slightly down from 10.7% in November.

Core inflation (excluding energy, food, alcohol and tobacco) was, however, unchanged from November at 6.3%. Food inflation was at 16.9%.

The Bank of England’s next policy meeting is on 2nd February. The Bank of England’s Bank Rate is currently 3.5%.

There are factors that could contribute to us seeing lower inflation prints going forward – including a strengthened pound making imports cheaper, lower house prices and better energy prices than feared. On the flip side, there are considerable risks to the upside – including higher inflation expectations, the FTSE reaching all-time highs, public sector strikes and wage negotiations and increased commodity demand from a reopening China.

Issuers may do well to lock in current rates and reduce the risk they carry.