The UK Consumer Prices Index (CPI) annual inflation rate rose through December to 3.7%, up from 3.3% in November.

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

The rise applies 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.