Hospitality: Interest rates to rise further to match inflation
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The Office for National Statistics said inflation rose to 5.4 percent in December from 5.1 percent in November. This is well above the Bank of England’s target of 2 percent. Responding to the rise in inflation, Chancellor Rishi Sunak said: “I understand the pressures people are facing with the cost of living and we will continue to listen to people’s concerns as we have done throughout the pandemic.
“We’re providing support worth around £12 billion this financial year and next to help families with the cost of living.
“We’re cutting the Universal Credit taper to make sure work pays, freezing alcohol and fuel duties to keep costs down, and providing targeted support to help households with their energy bills.”
The rise in the consumer price index exceeded economists predictions who expected the rate to stay at around 5.1 percent.
The UK’s cost of living has risen (Image: GETTY )
The rise in inflation has exceeded economists expectations (Image: GETTY )
This has not been seen in the UK since early 1992 when inflation was decreasing from a peak of 8.4 percent.
Grant Fitzner, chief economist at the ONS, said: “The inflation rate rose again at the end of the year and has not been higher for almost 30 years.
“Food prices again grew strongly while increases in furniture and clothing also pushed up annual inflation.
The UK is gripped in a cost of living crisis (Image: GETTY )
“These large rises were slightly offset by petrol prices, which despite being at record levels were stable this month, but rose this time last year.
“The closures in the economy last year have impacted some items but, overall, this effect on the headline rate of inflation is negligible.”
The news comes after figures revealed average pay rises are failing to keep up with the rising costs of living.
Average pay rises are failing to keep up with the rising costs of living (Image: GETTY )
Shadow business secretary Jonathan Reynolds said there is a “triple whammy” facing families.
He told BBC Radio 4’s Today programme: “You’ve got real wages and incomes, even for pensioners, falling because of inflation.
“You’ve got substantial tax rises. You’ve got huge rises in energy bills.
The ONS said inflation was pushed higher by food and non-alcoholic drinks prices last month (Image: GETTY )
“It is our job to hold the Government to account and that it exactly what we’re doing, and we’re laying out serious costed alternative positions to take that would make a real difference to people’s incomes.
“Again, I think that is in a very positive contrast to a Government which doesn’t seem to be able to do anything other than try and defend itself.”
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