Inflation leaps by record amount

The consumer prices index (CPI) rate of inflation has jumped by one per cent in a single month, the Office for National Statistics (ONS) has revealed.

Data released today (January 19th) showed that the rise from 1.9 per cent in November to 2.9 per cent in December was the largest monthly increase on record.

It stated that the rise was due to a number of “exceptional” events in December 2008 dropping out of the calculation, including the change in VAT from 17.5 per cent to 15 per cent, falls in oil prices and widespread retailer discounting.

Higher fuel costs and rises in clothing and footwear expenses were the largest upward influence on inflation in the last month, the ONS stated.

Such influences could have a particularly negative impact on drivers who have debt management problems as their motoring costs rise.

The hike in CPI was predicted by the Bank of England in its November Inflation Report, when it stated that the rate was “likely to rise sharply to above the two per cent target in the near term”.

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