Inflation hits 3.7%

There was a sharp rise of the cost of living in December according to the latest figures that show headline inflation reached 3.7% during the month.

The Consumer Prices Index (CPI) jumped from 3.3% in November to 3.7% in December, a much higher than analyst expectations. The unexpected hike is being put down to the depreciation of the pound and the rising cost of petrol, energy and food.

It does not include January's VAT increase and – the effects of which remain to be seen.

Brendan Barber from the Trades Union Congress, which represents organised workers across the nation, said: ‘The alarming rise in inflation means prices are running well ahead of pay deals.

‘This will make a tough year for workers even harder to bear, particularly for public servants suffering a sharp real terms pay cut.

‘Fuelling inflation with a VAT hike will hit workers in their wage packets and shopping receipts.

‘This tax rise is bad for working families and damaging for the economy too.

‘Surely it is now time for the Chancellor to use the budget to reconsider the VAT increase.’

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