UK Inflation Soars to 30-Year High

Britain’s inflation rate rose in its fastest pace in nearly 30 years as higher energy costs and persistent supply chain issues drove up consumer prices in December.

Inflation hit 5.4 percent year-on-year in December, its highest since March 1992, and was up from 5.1 percent in November which was already a decade-high, according to data from the Office for National Statistics.

The Consumer Prices Index including owner occupiers’ housing costs (CPIH), went up 4.8 percent in December, up from 4.6 percent in November and the highest since September 2008. The largest contributions came from housing and household services and transport.

The Bank of England (BOE) is expected to push up interest rates again during its monetary board meeting next month as it forecasts price increases to peak at 6 percent in April. The BOE was the first major central bank to lift borrowing costs from its pandemic lows.

Some analysts expect the rate to reach as much as 7 percent unless the government funds the energy sector to help ease skyrocketing costs.

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