UK inflation rate highest for two years

UK inflation has jumped to 1.6%, the highest rate since July 2014.

Consumer Price Index (CPI) inflation rose 0.4% from 1.2% in November, according to figures from the Office of National Statistics (ONS).

The rise was double that expected by analysts, as the economy started to see the effects of Brexit and inflation pushed up by rising food prices and air fares.

ONS head of inflation Mike Prestwood said: “This is the highest CPI has been for over two years, though the annual rate remains below the Bank of England’s target and low by historical standards.

“Rising air fares and food prices, along with petrol prices falling less than last December, all helped to push up the rate of inflation.

“Rising raw material costs also continued to push up the prices of goods leaving factories.”