UK inflation has hit a three-decade high, putting more pressure on the Bank of England to raise interest rates again.
The consumer prices index jumped by 5.4% in the 12 months to December, according to figures out this morning from the Office for National Statistics (ONS).
It marks the fastest pace of price rises since 1992.
There are concerns that inflation could now hit 7% in the next few months.
The rising price of food and non-alcoholic drinks contributed to December's increase, as did household costs - especially energy bills.
The rate continues to be well above the Bank of England's 2% inflation target.
Separate ONS figures issued on Tuesday showed that average pay rises are failing to keep up with the rise in the cost of living.
Paul Dales, of Capital Economics, told the BBC that inflation was now expected to hit 7% by April.
"That would be higher than the peak of 6% that the Bank of England was forecasting when it raised rates (to 0.25%) in December."
"And, although inflation will fall back thereafter, we think it will stay above 4% for all of this year and won't drop to the 2% target until April 2023."
As a result, he said, the Bank of England's Monetary Policy Committee was likely to raise interest rates faster than most people expected, with the next increase to 0.5% expected in February.
FTSE 100
The UK's top share index, the FTSE 100, got off to a subdued start this morning and, just after 8am, it was down by just two points.
Stocks fell on both sides of the Atlantic yesterday.
The FTSE 100 finished the day down by 47.68 points, or 0.6%, to 7,563.55.
The index was weighed down by shares of consumer companies and industrial stocks, while improving employment conditions in the UK and rising US Treasury yields signalled growing bets of tighter monetary policies.
Shares in the US had an even tougher time, with all three major stock benchmarks closing sharply lower.
Losses were led by the technology-laden Nasdaq Composite Index - down by sank 386.86 points, or 2.6%, to finish at 14,506.90.
The Dow Jones Industrial Average slipped by 543.34 points, or 1.5%, at 35,368.47, while the S&P 500 dipped by 85.74 points, or 1.8%, to 4,577.11.
Companies reporting today
Finals: Crest Nicholson
Trading updates: Burberry, Galliford Try, JD Wetherspoon, Pearson, Wise.
AGM: WH Smith
Other updates: ONS - house price index for November; Treasury select committee hearing with Bank of England governor Andrew Bailey on the Bank's recent financial stability report.