UK inflation hits near 30-year high as food prices surge

Thursday, Jan 20, 2022

LONDON: Britain’s rate of inflation has rocketed to its highest level for nearly 30 years as the cost-of-living squeeze intensifies, according to official figures.

The Office for National Statistics (ONS) said Consumer Prices Index (CPI) inflation jumped from 5.1 per cent in November to 5.4 per cent in December – 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 last month, 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 and supply chain problems are pushing up costs across the economy.

The Bank of England has forecast inflation to hit 6 per cent in April. Policymakers raised interest rates last month, from 0.1 per cent to 0.25 per cent, to try to cool rampant inflation, and many experts expect another rise possibly as soon as early next month.

Grant Fitzner, chief economist at the 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 figures come amid mounting pressure on the Government to help with eye-watering rises in gas and electricity bills, with fears that many vulnerable people are choosing between heating their homes and buying food.

Chancellor Rishi Sunak said: “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.”

The ONS figures also showed that the Retail Prices Index (RPI) measure of inflation soared to its highest level since March 1991- hitting 7.5 per cent last month, up from 7.1 per cent in November. It said food and drink prices lifted by 4.2 per cent year on year in December, which is the biggest rise since September 2013.