Why has the inflation rate risen?
The UK’s annual inflation rate rose to 1.6 per cent in December, this is up from 1.2 per cent in November. It’s also the highest rate since July 2014.
The Office for National Statistics (ONS) said the higher cost in food and rising air fares helped increase December’s Consumer Prices Index (CPI).
The rise was much bigger than expected, economists believed there would be a rise of 1.4 per cent.
Mike Prestwood, ONS head of inflation said: “This is the highest CPI has been for over two years, though the annual rate remains below the Bank of England’s target and low by historical standards,”
“Rising air fares and food prices, along with petrol prices falling less than last December, all helped to push up the rate of inflation.”
“Rising raw material costs also continued to push up the prices of goods leaving factories.”