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19 January 2022

How inflation has surged to its highest level since 1992

The cost of living in the UK rose by 5.4 per cent in the year to December 2021.

By Katharine Swindells

The cost of living in the UK rose by more than 5 per cent in 2021, the fastest monthly growth in almost 30 years.

The latest release of the Consumer Price Index shows that inflation rose from to 5.4 per cent in the 12 months to December 2021, up from 5.1 per cent in November. This is the highest since March 1992, and higher than the peaks before and after the 2008 financial crisis. 

The surge in the cost of living was mostly driven by rising housing costs, notably a significant rise in gas and electricity prices following the increase in the energy price cap in October. Experts estimate that household energy bills could increase by another 75 per cent in 2022 to more than £2,200 per year.

There was also significant growth in prices of food and non-alcoholic beverages, restaurants and hotels, and furniture and household goods.

The Trades Union Congress general secretary Frances O’Grady warned the rise in inflation would worst affect low-income families, and called for the Chancellor, Rishi Sunak, to present a plan to tackle the crisis.

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