Britain's inflation rate accelerated faster than expected to 3 per cent in December, official data showed today.
The figures, the highest since comparable records began a decade ago, may go some way to explaining why the Bank of England (BoE) raised interest rates last week, particularly as the Retail Price Index measure, the basis for most wage settlements, rose to its highest in 15 years.
The BoE targets consumer price inflation at 2 per cent and is required to write an explanatory letter to the government should it deviate more than one percentage point from this level.
The Office for National Statistics (ONS) said consumer prices rose 0.6 per cent on the month in December, lifting the annual rate to 3 per cent. Analysts had forecast a reading of 2.8 per cent.
Inflation has been above the Bank of England's target since May.
The ONS said the biggest upward effect on prices in December came from transport costs, which were boosted by rising petrol prices and a fuel duty increase announced by finance minister Gordon Brown.
Retail price inflation rose to 4.4 per cent, the highest since December 1991.