Commenting on the news that CPI inflation rose from 5.1% to 5.4% in December, Kitty Ussher, Chief Economist at the Institute of Directors, said:
“We already knew that the rise in the price of energy, fuel and second-hand cars was likely to keep inflation way above the Bank of England’s 2% target in December. What is of particular concern is that the change from November has come mainly from an increase in the price of food. Not only does this provide additional evidence that inflation is becoming endemic rather than transitory, it also bodes ill for households facing multiple rises in the cost of living this spring.
“We therefore expect interest rates to rise again when the Bank of England Monetary Policy Committee next meets in early February.”
The Office of National Statistics release states that the largest contribution to the rise in inflation between November and December came from a rise in the price of food and non-alcoholic beverages.