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Inflation falls slightly after two months of rises

It means prices are still rising but at a slower pace than before, according to Office for National Statistics (ONS) data for December.

Economists had expected the figure to remain at 2.6%.

Inflation is still above the 2% target of interest rate setters at the Bank of England but exactly as they had forecast in November.

It may mean there is more chance of an interest rate cut when the Bank’s rate-setting Monetary Policy Committee meets in three weeks’ time.

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