Inflation has soared to its highest rate in three decades.
Gatekeepers News reports that Britain’s Consumer Price Index inflation has increased by more than expected to 5.4 per cent – its highest rate in 30 years.
The Office for National Statistics (ONS) revealed that December’s figure was up from 5.1 per cent in November, which is the highest since 1992 as the cost of living continues to increase.
In December, Economists polled by Reuters had forecast that the rate would get to 5.2 per cent, so the official reading was 0.2 percentage points above the estimates.
This has affected household finances as gas and electricity tariffs have also seen major increases and supply chain problems are inflating the costs across the economy.
According to ONS, the price of goods produced by UK factories was up 9.3 per cent in the year to December which is lower than the 9.4 per cent rise in the year to November.
Meanwhile, the price of materials and fuels used by manufacturers rose to 13.5 per cent in the year to December, down from the 15.2 per cent growth in the year to November.
This report follows a separate data which was released yesterday. The data showed that wage growth was outstripped by inflation in November 2021 in more than a year – for the first time since July 2020.
The inflation rise reflected a range of goods and services, with the biggest impact from food and drink, followed by restaurants, hotels, furniture, and household goods.
The highest inflation rate was last witnessed in March 1992 at 7.1 per cent.
The recent increase will add pressure on the Bank of England to raise interest rates again next month.
In December, the Bank became the world’s first major central bank to raise interest rates since the start of the pandemic, from 0.1 per cent to 0.25 per cent.
The move, which was an attempt to try to tilt the inflation rate, came a day after data showed CPI had unexpectedly surged to a 10-year high in November.
This whole issue has added to the political problem of Boris Johnson, who is facing calls to offset an expected 50 per cent rise in regulated household energy prices in April.
In response to the rise in the CPI inflation, Chancellor Rishi Sunak said today: “I understand the pressures people are facing with the cost of living and we will continue to listen to people’s concerns as we have done throughout the pandemic.”
