UK inflation rose at its fastest pace in nearly 30 years in the year to December, according to the latest figures from the Office for National Statistics (ONS).
The UK’s Consumer Prices Index measure of inflation rose to 5.4% from 5.1% in November, ONS said.
The last time inflation was higher was in March 1992, when it was 7.1%.
The rising price of food and non-alcoholic drinks contributed to December’s increase, as did household costs, especially energy bills.
Increases in prices of furniture and clothing also contributed to the rise in the cost of living.
Alpesh Paleja, CBI Lead Economist, said: ‘We’ve not seen the end of rising inflation yet. We expect it to peak in the months ahead, not least if, as expected, the energy price cap is raised.
‘With prices on the rise and real wages already falling, it’s likely households will face a cost-of-living crunch for much of this year.
‘And with price pressures further up the supply chain still strong, the cost of doing business will also continue to climb sharply.’
|Need help with your accounts? Please do not hesitate to contact us.