Inflation in the UK unexpectedly rose to 4 per cent in December, the first increase in 10 months which is though to be the result of increases in the cost of tobacco and alcohol, reports The Guardian.

The increase complicates the timing of interest rate cuts from the Bank of England this year and also led to shares on the FTSE 100 to fall by 1.5 per cent, the worst daily fall since last August, reports The Guardian.
According to the Office for National Statistics, the UK’s annual inflation went up from 3.9 per cent in November, contradicting City economists’ forecasts of a modest decline to 3.8 per cent.
The rise in the annual rate is thought to be down to an increase in cost of tobacco following a rise in duty and alcohol. The cost of buying tobacco contributed the most to inflation since 2006 with the price of tobacco increasing by 16 per cent and alcohol by 9.6 per cent, reports The Guardian.
Grant Fitzner, ONS chief economist, said the rises in tobacco and alcohol costs “were offset partially by falling food inflation, where prices still rose but at a much lower rate than this time last year. Meanwhile, the prices of goods leaving factories are little changed over the last few months, while the costs of raw materials remain lower than a year ago.”
Core inflation, which excludes items such as energy, food, alcohol and tobacco, remained unchanged at 5.1 per cent, according to The Guardian.