Official figures show that Britain's annual rate of inflation surged to 3% in December, hitting a 10-year peak. The rate had been 2.7% in November.
Inflation was above the Bank of England's government-set target of 2% for the eighth month in a row, and the rate marked the highest level since Labour came to power in 1997.
Should inflation climb above 3%, BoE governor Mervyn King would be forced to write an official letter of explanation to British Chancellor Gordon Brown. In a surprise move last Thursday, the bank had hiked interest rates by a quarter of a point to 5.25% to combat rising inflation.
December's rise was due to increased fuel costs after petrol increased by 2p a litre in December following a rise in fuel duty. The Retail Prices Index (RPI), seen as a more representative measure of the cost of living as it also includes housing costs, spiralled to 4.4% - the highest since December 1991.
Electricity and gas contributed to the inflation rise, having now reached a 10-year high annual inflation rate of 30.2%, according to the ONS.
