Living costs soared by 5.1% in the 12 months to November 2021 to reach their highest level since September 2011.
The main rate of inflation, as measured by the Consumer Prices Index, increased 0.9% from the 4.2% recorded in the 12 months to October 2021.
Forecasts from the Office for Budget Responsibility recently suggested inflation would peak at around 5% in spring 2022.
Rising prices in fuel, energy, clothing and second-hand cars ensured that prediction went out of the window before the end of the calendar year.
With surging inflation and record-low interest rates, the news delivers a double-whammy to consumers ahead of the Christmas break.
Steve Cameron, pensions director at Aegon, said:
“Millions of people are already feeling the squeeze in the cost of living, particularly during a festive period when disposable incomes are often at their most stretched.
“Those holding large amounts in cash savings are particularly at risk from high inflation.
“The other group particularly affected are pensioners on a fixed income. The state pension is due to increase by 3.2% next April, 1.9% less than where inflation is currently sitting.”
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