LONDON: Official figures show that inflation in the United Kingdom hit a new high of 5.5 percent in January, breaking a near 30-year high set in December 2021, bolstering the case for future interest rate hikes.
According to Grant Fitzner, head economist of the country's Office for National Statistics (ONS), clothing and footwear drove increased inflation. He went on to say that growing expenses of some household goods, as well as rising rents, contributed to the increase.
The price rises continue to reflect the global imbalance between supply and demand, said Tom Pugh, an economist at RSM UK, a business advising firm, as goods prices were once again the key reason for the acceleration. The hikes have had a significant influence on people's daily lives. According to Jamie O'Halloran, an economist at Pro Bono Economics, the cost of pasta alone jumped by 11.4 percentage points between December 2021 and January 2022, while the cost of coffee grew by six percentage points.
In December 2021, inflation in the United Kingdom increased by 5.4%. The recent increases remained much over the Bank of England's 2% objective (BoE). They prompted the Bank of England to raise interest rates twice in December and February, marking the first time it has done so since 2004.
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