UK inflation hit 5.5% in January as consumer prices hit their highest level since 1992, the Office for National Statistics said on Wednesday.
The rise compared with December’s 5.4% and forecasts of an unchanged figure and is another sign of the increasing squeeze on household budgets. The ONS said there had been fewer January sales as retailers looked to pass on higher costs.
“Clothing and footwear pushed inflation up this month and although there were still the traditional price drops, it was the smallest January fall since 1990, with fewer sales than last year,” said ONS chief economist Grant Fitzner.
He added that the rising cost of some household goods and increases in rents also pushed up inflation. However, these were partially offset by lower fuel prices after record highs at the end of last year.
The Bank of England earlier this month said it expected inflation would peak at around 7.25% in April, when a 54% rise in regulated household energy bills take effect.
It has already hiked interest rates twice since December to 0.5% from 0.1%. Economists are tipping another rise to 0.75% or 1% on March 17 after the central bank’s next meeting.