UK inflation rose at its fastest annual pace for nine months in December.
The Office for National Statistics said Consumer Price Index (CPI) inflation rose 0.6% last month, taking the annual rate up to 2.9% from 1.9% in November.
That was the biggest monthly rise in the annual index since records began and exceeded the City’s expectations for an increase to 2.6%.
The Retail Price Index (RPI), which includes housing costs, rose to 2.4%, its highest level since November 2008.
This was a rise from 0.3% in November, and also constitutes the biggest monthly rise in the annual rate of RPI inflation since 1979.
Unusual factors
The annual increase in CPI mainly came about because of a number of unusual factors that had depressed prices a year earlier. These included a near-record fall in oil prices in December 2008, the VAT cut to 15% and retail discounting, the Office for National Statistics said.
Ten out of 12 sub-sectors recorded higher prices, with the biggest increases coming from transport and clothing and footwear.
Core CPI, which excludes food, energy, tobacco and alcohol, rose by 2.8% on the year, which is the fastest pace of growth since records began in January 1997.
The RPI and CPI measure the change in prices charged for goods and services bought by households in the UK. It is based on average spending patterns for UK households.
The CPI does not take into account certain items that are included in the RPI. The Retail Price Index includes council tax, mortgage interest payments, buildings insurance and house depreciation.
www.warren-knight.com thanks BBC