UK CPI inflation rate rises to 3.7% in December

UK inflation jumped in December with the Consumer Prices Index (CPI) rising to 3.7%, up from 3.3% in November.

Retail Prices Index (RPI) inflation - which includes mortgage interest payments - rose to 4.8% from 4.7%.

The rise will put further pressure on the Bank of England to lift interest rates to curb rising inflation.

The recent VAT rise from 17.5% to 20% could further fuel inflation, which has now remained above the 2% target by one percentage point or more for 13 months.

Prices rose 1% between November and December, a record change between those two months.

Hugh Pym reports.