Inflation comes in slightly higher than expected, up from 3.6% to 3.8% largely driven by a spike in air fares

“Today’s inflation reading is another blow for UK households already contending with rising bills. Families may no longer face the double-digit surges of two years ago, however with prices still running at nearly twice the Monetary Policy Committee’s (MPC) 2% target, households are still very much in the grip of the cost of living squeeze.

“Everyday essentials, from food to energy, take their toll and rail passengers now face the prospect of another hefty jump in fares, with today’s figure used to calculate price rises for next year.

“Borrowers at least have something to cling to. The MPC’s recent rate cut has eased repayments for those on tracker mortgages, and lenders are cutting deals aggressively in a scramble for business. That has offered a glimmer of relief for homeowners.

“But for savers, the only way to describe today’s reading is ‘grim’. Falling savings rates combined with high inflation mean cash is steadily being eroded. Savers may want to look to secure the best-paying accounts or consider long-term investments that have the potential to deliver greater growth in real returns.”