Inflation Rises As Utility Costs Climb

A rise in utility bills and housing costs has helped to push the UK’s inflation rate up, with December’s figure hitting its highest level since June 2003, according to the Office for National Statistics.

According to the ONS, the consumer price index has risen by 1.6% year on year in December. The bulk of the blame is being placed on housing, water, electricity and gas prices, which have risen by 5.4% in the same period. Rising costs of recreational items and household furniture were also cited by the ONS as reasons for the increase.

Meanwhile the Retail Price Index has risen from 3.4% to 3.5%. The underlying RPI rate, excluding mortgage interest payments, rose to from 2.2% in November to 2.5% in December.

The latest figures mean that inflation remains below the Government target of 2%. However, speculation is mounting that interest rates could rise this year.

Office for National Statistics: 0845 601 3034 www.statistics.gov.uk
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