The CPI including owner occupiers' housing costs (CPIH) also rose by 4.2% in the 12 months to December 2023, the same as November.

According to ONS, the largest upward contributor to CPIH and CPI came from alcohol and tobacco, while the largest downward contributor consisted of food and non-alcoholic beverages.

Industry experts react to the latest ONS inflation data:

Ben Perks, managing director at Orchard Financial Advisers: 

"Today’s CPI announcement has gone much like my new year's resolutions, in short, not to plan.

“While not completely unexpected, a slight increase to 4% is not the news borrowers were hoping for.

“This shouldn’t, however, trigger an increase in the base rate from the BoE.

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“Stability is key and I hope they will hold — this morning's news is likely to affect swap rates, though, which could bring an abrupt end to the lender price war we’ve enjoyed so far this year."

Andrew Gething, managing director of MorganAsh:

“Today’s inflation figures are a reminder that firms shouldn’t count their chickens just yet.

“While there has been much expectation of reaching the 2% target and a potential base-rate drop, the first increase in inflation in almost a year shows we may still be some way off.

“Markets and economists have been very confident about future cuts, despite ongoing caution from the central bank.”

Matthew Jackson, director at Mint FS: 

"CPI rising slightly in December could slam the brakes on the lender rate war that has been raging in January to date.

“It may only last for a month or so if the next print sees the downward trend in inflation continue. This pretty much guarantees that we will see a hold in the base rate at the next MPC meeting.

“But given the positive activity from buyers in the new year, this will have little to no effect on the growing demand for property among borrowers. It's a minor bump and not a black swan."