Economists are bracing for rises in the cost of living to have accelerated for a second month, as the Office for National Statistics publishes new data on inflation.
While inflation has fallen from a 41-year high of 11.1 per cent in October 2022 to below prime minister Rishi Sunak’s stated goal of 5 per cent by the end of 2023, it remains above the Bank of England’s longstanding target of 2 per cent.
While chancellor Jeremy Hunt celebrated a surprise fall to 3.9 per cent in November, the rate of inflation rose again in December to 4 per cent – and is now expected to have done so again last month.
The fresh figures, due on Wednesday morning, are expected to show that Consumer Prices Index inflation – a measure of the costs that households face – hit 4.2 per cent in January.
Economists will be watching keenly for signs on what impact the figures could have on the Bank of England’s base interest rate, which is causing pain for borrowers and homeowners struggling with higher mortgage rates.