LONDON: The Bank of England (BoE) is under increasing pressure to raise interest rates, with the UK's Consumer Prices Index (CPI) hitting its highest level since early 1992 in December 2021. The country's CPI increased by 5.4 percent in the 12 months to December 2021, according to official statistics issued on Wednesday.
Food and non-alcoholic beverages, restaurants and hotels, furniture and household products, and apparel and footwear all saw price increases in December, according to the country's Office for National Statistics (ONS).
"Food costs rose sharply again, while increases in furniture and apparel also pushed up yearly inflation," according to Grant Fitzner, the ONS' chief economist. "Petrol prices, which, despite being at record highs, were unchanged this month but jumped this time last year, somewhat offset these substantial increases." In December, the United Kingdom increased restrictions to combat the spread of the extremely dangerous Omicron coronavirus strain.
"The economy's closures last year hurt some products," Fitzner said, "but the overall effect on the headline rate of inflation is minor." After decreasing the interest rate to a record low during the Covid-19 epidemic, the Bank of England lifted it for the first time in more than three years in December 2021.
The decision was made as annual CPI inflation in the country climbed to a decade high of 5.1 percent in November, up from 3.1 percent in September.