This sent food and drink inflation back up to 4.9% by October, having been firmly on a downward path in the previous year. While good news for over a million mortgage borrowers, it was also a sign of some of the weaknesses in the UK economy – in particular the jobs market. As well as rising wage costs, the unstoppable rise of artificial intelligence (AI) was also increasingly cited as a factor in company decisions worldwide to trim their workforces. As the US imposed a 10% blanket tariff on most UK goods entering the world’s biggest economy, economic growth slowed sharply in April, amid a record drop in exports to America. Matt Swannell, chief economic adviser to the EY Item Club, warned “another year of sluggish growth for the UK economy is expected in 2026”.

Source: The Times December 30, 2025 20:24 UTC