British inflation jumped higher than expected in December, rising to its highest level in two years.
The CPI figure for inflation rose 1.6 percent year-one-year, up from 1.2 percent the previous month. Economists had been predicting a rise of 1.4 percent, but the figure was lifted higher by a rise in air fares and groceries.
ONS Head of Inflation Mike Prestwood commented on the figures:
“This is the highest CPI has been for over two years, though the annual rate remains below the Bank of England’s target and low by historical standards.
“Rising airfares and food prices, along with petrol prices falling less than last December, all helped to push up the rate of inflation.
“Rising raw material costs also continued to push up the prices of goods leaving factories.”
Consumer inflation as measured by the Retail Prices Index (RPI) also rose, hitting 2.5 percent in December from 2.2 percent the previous month.
The pound pushed higher after the figures, after hitting lows earlier today ahead of Theresa May’s speech on Brexit at 11.45am.