LONDON, England : Consumer prices in the UK have risen at their fastest rate in nearly 30 years, but experts warn that the worst is still to come.
Inflation was 5.4 percent in the 12 months to December from 5.1 percent in November, the highest since March 1992, when it was 7.1 percent, due to the energy bill crisis and surging food costs.
Inflation will reach 7.1 percent in the spring, as gas and electricity costs are set to rise further in the spring.
Fuel bills could increase by another 50 percent in the next few months, according to the energy industry, as the government's fuel price cap will be revised on 1 April, which is due to the 1st April of this year.
The high cost of food is too much for many people. Richard Walker, head of Iceland's supermarket chain, said there was an alarming rise in the use of food banks, and that there may be some people facing a choice between heating or eating. The Office for National Statistics said there were increases in furniture, food and clothing prices that contributed to the rise in the cost of living in December.
Chancellor Rishi Sunak said he understands the pressures the public is facing, but the opposition Labour party said working families faced an impending triple whammy of financial pressures.
The Bank of England is expected to raise interest rates in order to bring inflation closer to its 2 percent target as a result of the latest figures.
People with low incomes would be particularly hard hit, according to Paul Johnson, director of the Institute for Fiscal Studies.
He said that any increase at this point is going to be particularly painful for those on modest incomes, because of the long period of wages not really growing faster than prices over the last decade.
According to Paul Dales of Capital Economics, inflation is expected to hit 7 percent by April.
That would be higher than the 6 percent forecast by the Bank of England when it raised rates in December. He said that although inflation will fall back, we think it will stay above 4 percent for the entire year and will not drop to the 2 percent target until April 2023.
The current high prices for gas, electricity, food and used cars will go up in the coming months, according to BBC economics editor Faisal Islam.
The Retail Price Index, an inflation measure that is still widely used by governments and some businesses, is already at 7.5 percent.
The businesses that are facing surging wholesale prices must decide whether or not to pass on these costs to consumers.
Kate Greig, who runs Kent Food Hubs, a co-operative that assists traders and producers in the UK to sell direct to customers, told the BBC: Food is more expensive, fuel is more expensive.