VAT change sends UK inflation soaring

Last month’s reversal in the UK's VAT reduction saw inflation in Britain leap to 3.5% in January – its highest level since November 2008, official figures revealed today.

The Office for National Statistics (ONS) said the rise in Consumer Prices Index (CPI) inflation came as the cost of alcohol, tobacco, hotels and restaurants soared after the Government raised VAT tax back up to 17.5%.