LONDON: Britain’s annual inflation rate rose in January to 5.5 per cent, the highest level for almost 30 years, official data showed today, heaping more pressure on the cost of living.
The Consumer Prices Index (CPI) edged up from 5.4 per cent in December, the Office for National Statistics confirmed in a statement.
At 5.5 per cent, the level was the highest since March 1992, the ONS said.
Prices have soared globally over the past year, in large part owing to surging energy prices, while consumers are facing also higher food costs as economies reopen from pandemic lockdowns.
“We understand the pressures people are facing with the cost of living,” British finance minister Rishi Sunak said in response to today’s data.
“These are global challenges,” he added.
As inflation reaches the highest levels in decades, lagging rises to workers’ wages, central banks are deciding on how fast to raise interest rates.
The Bank of England earlier this month lifted its main interest rate for the second time in a row aimed at bringing down inflation.
The BoE has forecast Britain’s annual inflation rate to peak at 7.25 percent in April.
The latest “increase in CPI inflation… will add a bit more pressure on the Bank of England to continue raising interest rates rapidly”, said Paul Dales, chief UK economist at Capital Economics.
Policymakers in December lifted borrowing costs from a record-low 0.1 per cent to 0.25 per cent ― their first tightening in more than three years.
They raised again this month, to 0.5 per cent.
