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UK inflation has increased to 5.5 per cent, the highest in nearly three decades, amid the tightening cost-of-living squeeze, The Independent reports.

The rate of Consumer Price Index inflation hit 5.4 per cent in December and remains at a near 30-year high after rising to 5.5 per cent in January.

It comes as Britain remains in the grip of a tightening cost-of-living squeeze.

Grant Fitzner, chief economist at the Office for National Statistics (ONS), said clothing and footwear was among the factors behind the rise.

But inflation is soaring across the economy, driving CPI up to more than double the Bank of England’s 2 per cent target.

“Clothing and footwear pushed inflation up this month and although there were still the traditional price drops, it was the smallest January fall since 1990, with fewer sales than last year,” Mr Fitzner said.

“The rising costs of some household goods and increases in rents also pushed up inflation. However, these were partially offset by lower prices at the pump, following record highs at the end of 2021.

“Some annual changes this year are affected by last year’s lockdown, when many services were unavailable.”

Economists expect inflation to spike further to around 7 per cent by April when millions of households will be hit with a 54 per cent jump in their energy bills. Borrowers face a further squeeze after the Bank of England raised interest rates this month, with further hikes predicted.

Some of the pain is likely to be cancelled out by rising wages, with early estimates indicating employers were beginning to increase salaries in response to rising inflation.