Inflation soars to highest level in almost 30 years

Rate pushed higher by cost of food, furniture and clothes

UK inflation rose to 5.4% in December, reaching the highest level in almost 30 years (Getty Images)

Inflation rose to 5.4 per cent in December, reaching the highest level in almost 30 years.

The Office for National Statistics (ONS) said the rate of Consumer Price Index inflation increased to 5.4 per cent in December from 5.1 per cent in November – the highest since March 1992, when it stood at 7.1 per cent.

Most economists had expected inflation of 5.2 per cent in December.

The ONS said inflation was pushed higher by food and non-alcoholic drinks prices, with costs also rising for restaurants and hotels, furniture and household goods, as well as clothing and footwear.

Household finances are being squeezed across the board as gas and electricity tariffs have also seen staggering rises, with the Bank of England forecasting inflation to hit 6 per cent in April.

Grant Fitzner, chief economist at ONS, said: “The inflation rate rose again at the end of the year and has not been higher for almost 30 years.

“Food prices again grew strongly while increases in furniture and clothing also pushed up annual inflation.

“These large rises were slightly offset by petrol prices, which despite being at record levels were stable this month, but rose this time last year.

“The closures in the economy last year have impacted some items but, overall, this effect on the headline rate of inflation is negligible.”

Shadow business secretary Jonathan Reynolds said there families faced a “triple whammy”.

He told BBC Radio ‘s Today programme: “You’ve got real wages and incomes, even for pensioners, falling because of inflation.

“You’ve got substantial tax rises. You’ve got huge rises in energy bills.

“It is our job to hold the government to account and that it exactly what we’re doing, and we’re laying out serious costed alternative positions to take that would make a real difference to people’s incomes.

“Again, I think that is in a very positive contrast to a government which doesn’t seem to be able to do anything other than try and defend itself.”

Chancellor Rishi Sunak added: “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.

“We’re providing support worth around £12 billion this financial year and next to help families with the cost of living.

“We’re cutting the Universal Credit taper to make sure work pays, freezing alcohol and fuel duties to keep costs down, and providing targeted support to help households with their energy bills.”

Additional reporting by Press Association