UK inflation hits 30-year high

British annual inflation accelerated to a near 30-year high in December, official data showed Wednesday, stoking fears over a cost of living squeeze as wages fail to keep pace.

Economies worldwide are battling decades-high inflation that is forcing central banks to lift interest rates, including the Bank of England which last month raised its key borrowing cost for the first time in more than three years.

The UK's inflation rate hit 5.4 per cent last month, rising further above target on price gains for clothing, domestic energy, food and furniture, the Office for National Statistics said in a statement.

The BoE, whose chief task is to keep inflation close to a 2.0-per cent target, is now expected to hike again at its next meeting in February amid easing concerns over Omicron.

Britain's cost of living is forecast to soar even higher in April due to looming hikes in national insurance tax and domestic energy, analysts say.

"With consumer prices rising at their fastest rate for three decades and wage growth slowing, Britons are being squeezed ever harder by the cost of living," said Jay Mawji, managing director of global liquidity provider IX Prime.

Inflation had already forged a decade-high of 5.1 per cent in November.

The rate had hit 7.1 per cent in March 1992.

"The inflation rate rose again at the end of the year and has not been higher for almost 30 years," said ONS chief economist Grant Fitzner.

"Food prices again grew strongly while increases in furniture and clothing also pushed up annual inflation."