UK inflation rose to 3% in the year to January, up from 2.5% in December according to the Office for National Statistics (ONS).
The spike was largely attributed to VAT being added to private school fees but food prices were also up.
Stuart Morrison, Research Manager at the British Chambers of Commerce, said:
“The data underlines the inflationary pressures in the economy right now and the real challenges businesses are facing.
“Firms are having to deal with significant cost burdens which threaten to fuel inflation further. Within weeks they’ll be facing the hikes in national insurance contributions and the minimum wage.
“Our latest research shows a spike in the proportion of firms expecting to raise prices following the Autumn Statement, while business confidence has dipped to 2022 levels. Overall, 75% of businesses cited labour costs as a main driver of price hikes and yesterday’s wage data is another reminder of that.
“The inflation landscape, coupled with ongoing global risks and the looming threat of US tariffs, is likely to give the Bank of England more food for thought, as it charts a cautionary path to further interest rate cuts.
“Businesses are crying out for cost-pressures to be eased so that they can invest, recruit and trade – driving forward the economic growth we all want to see.”
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