Inflation, pensions, housing and fraud

Inflation has risen more than expected and the headline rate is now at its highest level since July 2014.

Figures from the Office for National Statistics (ONS) showed the Consumer Price Index (CPI) hit an annual rate of 1.6 per cent in December – up from 1.2 per cent the previous month. Economists had predicted an increase to 1.4 per cent.

Weaker sterling since the Brexit vote has affected the cost of many prices. The ONS said that higher food prices and air fares helped to increase the CPI.

Ben Brettell, senior economist at Hargreaves Lansdown, said: ‘December’s producer price data contains a strong indicator that higher inflation is coming. Input costs rose 15.8 per cent year-on-year – the highest figure recorded for more than five years. It’s unlikely that cost increases of this magnitude can be fully absorbed by firms, leaving them with little choice but to pass some on to consumers in the coming months.