UK inflation has surged to 3%, up from 2.5%- the steepest rate since March 2024, in what is another hammerblow for Rachel Reeves.
The Chancellor is desperately fighting to inject some positive momentum into the UK economy.
But economists have said the inflation jump was larger than expected, which follows Labour’s private school tax raid, as well as rising food costs and plane fares.
Consumer Prices Index (CPI) inflation rose to 3% in the 12 months to December, up from 2.5% the previous month, the Office for National Statistics (ONS) has said.
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Ms Reeves has faced ongoing backlash since her October Budget, with Shadow Chancellor Mel Stride raging: “Today’s inflation figures mean further pain for family finances – and it’s thanks to the Labour Chancellor’s record tax hikes and inflation busting pay rises.
“Labour were warned that their tax spending and borrowing spree would drive up inflation. It means higher prices in the shops, and interest rates staying higher for longer, causing mortgage misery for millions.
“This Chancellor is out of her depth, and we’re all paying the price.”
ONS Chief Economist Grant Fitzner said: “Inflation increased sharply this month to its highest annual rate since March last year.
“The rise was driven by airfares not falling as much as we usually see at this time of year, partly impacted by the timing of flights over Christmas and New Year. This was the weakest January dip since 2020.”
Ms Reeves has responded to the figures, saying: “Getting more money in people’s pockets is my number one mission. Since the election, we’ve seen year-on-year wages after inflation growing at their fastest rate – worth an extra £1,000 a year on average – but I know that millions of families are still struggling to make ends meet.
“That’s why we’re going further and faster to deliver economic growth. By taking on the blockers to get Britain building again, investing to rebuild our roads, rail and energy infrastructure and ripping up unnecessary regulation, we will kickstart growth, secure well-paid jobs and get more pounds in pockets.”
