INFLATION in the UK has hit the "highest rate for over a decade", new analysis shows, amid price rises on petrol, food and cigarettes.

The rate of Consumer Price Index inflation increased to 5.1 per cent in November from 4.2 per cent in October, the Office for National Statistics has said.

Grant Fitzner, chief economist at the Office for National Statistics (ONS), said: “A wide range of price rises contributed to another steep rise in inflation, which now stands at its highest rate for over a decade.

“The price of fuel increased notably, pushing average petrol prices higher than we have seen before. Clothing costs – which increased after falling this time last year – along with price rises for food, second-hand cars and increased tobacco duty all helped drive up inflation this month.

“The costs of goods produced by factories and the price of raw materials have continued to increase significantly to their highest rate for at least 12 years.”

'Omicron variant could stall recovery'

The costs of packaging have jumped more than 10% due to rising prices for energy, raw materials and supply chains, according to the boss of one of the UK’s biggest box makers.

Miles Roberts, chief executive of DS Smith, said these prices have been passed on to his customers.

But despite retailers and online sellers paying more for packaging, companies are using the structural shifts to more online shopping to improve the quality of packaging used.

Meanwhile one business group shared its predictions on the UK economy for 2022.

The UK economy will grow at a slower pace than expected next year, with trade set to lag “significantly”, according to The British Chambers of Commerce (BCC).

The BCC said economic growth was projected to slow down to 4.2 per cent in 2022, compared to its previous forecast of 5.2 per cent.

The downgrade largely reflects a softer outlook for consumer spending amid an anticipated “running down” of household savings built up during lockdowns, the BCC said.

Speaking in early December, Suren Thiru, head of economics at the BCC, said: “Our latest outlook suggests that the loss of momentum in the third quarter was more than just a temporary blip, with UK growth forecast to be more subdued for a sustained period as supply disruption, staff shortages and surging inflation limits activity.

“The downgrades to our forecast reflect a moderating outlook for key areas of the UK economy, including consumer spending and trade.

“Consumer spending is likely to be more restrained than expected over the near term from a combination of negative real wage growth and stretched household finances amid rising inflation.

“Trading conditions for UK exporters are expected to remain difficult over the forecast period with the lingering impact of Covid and Brexit expected to weigh on trade flows for some time to come.

“The Omicron variant could stall the recovery if it triggers a prolonged reluctance among consumers to spend or a renewed supply shock by exacerbating current staff shortages through a new ‘pingdemic’ and driving more supply chain disruption.”