Consumers will need to tighten their belts further after data released this week showed inflation rose by a higher than expected 5.4 per cent in the 12 months to December 2021, up from 5.1 per cent in November. While inflation has been driven primarily by energy costs and food prices in recent months, transport costs are now also posing an issue for consumers.
The Office for National Statistics (ONS) noted the largest upward contributions to the December Consumer Prices Index – including owner occupiers’ housing costs (CPIH) – 12-month inflation rate came from household services and transport costs. Transport costs alone have risen 1.29 percentage points over the past year, principally due to motor fuel costs rising and the resale value of second-hand cars going up.
In its report, the ONS said: “The contribution from transport has shown more variation than any other group over the past two years. It has ranged from a downward contribution of 0.2 percentage points in May 2020…