Inflation stuck at 2.7% with signs it may rise again

The rate of consumer price index inflation remained unchanged at 2.7% in December. Photo: PA Wire

Inflation is stuck at a relatively high level - 2.7 per cent - for the third month in a row and there are signs it may actually rise in months to come.

That matters (and hurts) because our wages aren't keeping up with prices - they are increasing by about 1.3 per cent at the last count and of course, for many people like public sector workers, wages aren't going up at all.

The money in your purse or wallet isn't going as far as it used to - in fact the TUC estimates that inflation has cost the average worker £4,000 over the past three years by eating away at spending power.

Today's data shows a familiar picture: big rises in utility bills announced in the Autumn are still feeding through while a fall in petrol prices is keeping things in check.

It could have been worse - food prices actually fell a fraction but poor harvests at home and abroad suggest they may push inflation higher in the months to come. That would cost anyone whose wages aren't keeping up even more.