BRITAIN'S rate of inflation has soared to its highest level for nearly 30 years as the cost of living prices intensify, according to official figures.

The Office for National Statistics (ONS) said Consumer Prices Index (CPI) inflation jumped from 5.1 per cent in November to 5.4 per cent in December. This is the highest since March 1992, when it stood at 7.1 per cent.

Most economists had expected inflation of 5.2 per cent in December.

The ONS attribute the inflation rise to higher food and non-alcoholic prices last month. The cost for restaurants and hotels also rose, as well as furniture, household goods and clothing.

South Wales Argus: Higher cost of food, household items and more (PA)Higher cost of food, household items and more (PA)

Household finances are being squeezed as gas and electricity tariffs have also seen significant rises, with the Bank of England forecasting inflation to hit six per cent in April.

The bank also raised interest rates last month, rising to 0.25 per cent from 0.1 per cent.

Many experts expect another rise, possibly as soon as early next month.

Grant Fitzner, chief economist at the ONS, said: “The inflation rate rose again at the end of the year and has not been higher for almost 30 years.

“Food prices again grew strongly while increases in furniture and clothing also pushed up annual inflation.

“These large rises were slightly offset by petrol prices, which despite being at record levels were stable this month, but rose this time last year.

“The closures in the economy last year have impacted some items but, overall, this effect on the headline rate of inflation is negligible.”