LONDON — The U.K. inflation rate soared to a 30-year high in December as higher energy costs, resurgent demand and supply chain issues continued to drive up consumer prices.

The annual inflation rate was 5.4% in March 1992. It is up from 5.1% November. a decade high. Reuters polled economic experts and predicted a 5.2% increase.

Monthly consumer prices rose 0.5%, surpassing economist predictions for 0.3%.

The rising cost of living raises expectations about the Bank of England raising interest rates. The Bank of England will raise interest rates again in December. BOE became the first major central bankto lift borrowing costs off their lowest point since the Pandemic Era.

The Monetary Policy Committee will meet on February 3rd. Markets are going to be watching closely as policymakers discuss another rate rise following the December 15-basis point jump to 0.25%.

The Bank operates against the background of an extremely tight labor market. Vacancies are at an all-time high, and unemployment remains below pre-pandemic levels.