Steep rise in inflation in December

INFLATION has reached a two and a half-year high as the sharp decline in the value of sterling increases prices across the board.

Price hikes in air travel, food, fuel and clothing prices have pushed inflation up to 1.6% from 1.2% in November 2016.

The rate is the highest since July 2014.

The Bank of England is expecting inflation to rise to nearly 3% in 2018 against a background of slowing economic growth.

The news comes ahead of Theresa May’s speech later today in which she is expected to outline her plan to enable the UK to exit the European Union.

Fears of a ‘hard Brexit’ have led the pound to slump to a near 30-year low against the dollar this week before bouncing back prior to the announcement, and falling to a low against the euro overnight.

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