The rate of price increases rose again in December, official figures have confirmed, with inflation rising to 3.4%.
It’s higher than anticipated – an increase to 3.3% was forecast by economists polled by the Reuters news agency.
Data from the Office for National Statistics (ONS) showed the consumer price index (CPI) measure of inflation ticked up from 3.2% a month earlier.
Higher tobacco prices, due to raised taxes, and more expensive airfares are behind the increase, the ONS said.
Elevated food costs, especially bread and cereal, were also said to have brought overall inflation up. Food inflation rose to 4.5% in the key Christmas shopping month.
The overall inflation rate was kept in check as rent rises were not as steep as before.
Lower oil prices also helped slow the rise in the cost of raw materials.
Looking ahead, inflation is expected to slow and could hit the Bank of England’s 2% target by April this year.
That could mean an interest rate cut or two and cheaper borrowing as a result.
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