UK inflation: What does the surprise rise to 4% mean for household budgets and bills?
Has inflation spiked in the UK's latest economic figures? The latest consumer prices index has been revealed by the office for national statistics. But what does the data show us? How do we stand when compared with other nations? And what will it mean for the everyday consumer? Here's our roundup of everything you need to know.
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00:00 The Prime Minister has been very keen to take credit for falling inflation in previous months.
00:08 Will he now take responsibility for today's rise?
00:14 Mr Speaker, Mr Speaker, inflation was over 11% when I got this job. Inflation today is
00:22 4%, Mr Speaker.
00:24 A Reuters poll of economists found that the experts were expecting inflation to drop slightly
00:29 to 3.8% in last month's data. They woke up to a surprise though. UK inflation has risen
00:35 for the first time in nearly a year to 4%. The rate of price growth was 3.9% last month,
00:42 but despite the rise, still sits at less than the Bank of England's 4.6% prediction, according
00:47 to the Office for National Statistics.
00:50 Inflation never falls in a straight line. We can see from the rest of the world, it's
00:53 gone up in France, the United States and the Eurozone. So we have a plan. We've taken very
00:58 difficult decisions to bring inflation down. That plan is working. And what today shows
01:04 is that we need to stick to that plan and then we will succeed.
01:08 All countries have seen a mild tick up in December, all countries have. But the crucial
01:13 thing is that inflation has been more than halved, delivered ahead of schedule and that
01:18 is having an enormous benefit to families up and down the country.
01:20 Sunak and Hunt both sought to reassure the public that the slight rise was in line with
01:25 other nations across the world and overall is still much lower than the start of Sunak's
01:30 premiership. But what will the increase mean for everyday household budgets and bills?
01:36 Salaries aren't always rising as fast as inflation. So it's the cost of living crisis. It's still
01:41 very much a challenge for a lot of people across the UK as things get more expensive.
01:48 Financial things, not just like the internet, but food, travel, all gets more expensive.
01:55 If their earnings are not going up at a similar rate, then that creates a bigger problem for
02:01 them.
02:02 The Consumer Price Index, or CPI, measures change over time in the prices paid by consumers
02:07 for a representative basket of goods and services. Looking at the latest figures, we can get
02:12 a sense for just how the cost of living crisis continues to affect UK households as a whole
02:17 and the prices of which particular items are rising or falling most sharply.
02:23 The Office for National Statistics has now unveiled their newest economic analysis based
02:27 on the latest data from December 2023. But what exactly is that data telling us?
02:33 The biggest drivers of inflationary rises for December were tobacco and alcohol products,
02:38 unsurprisingly so, as the cost of both have been the largest contributors to inflation
02:42 since 2006. Tobacco prices increased by 16% on the year, while alcohol was up 9.6%. The
02:51 rise was boosted by Jeremy Hunt's higher duties for tobacco products announced in the
02:55 autumn budget. This was slightly offset by food inflation, where food costs still rose,
03:01 but at a much slower rate than this time last year.