UK faces inflation threat 'no matter who is in Downing St' 

The upward movement in consumer prices means the country is entering a period of inflation regardless of who's in charge

UK prime minister Boris Johnson is under pressure from his own MPs in the wake of the 'partygate' revelations.

Boris Johnson has survived another week, but no matter who is in 10 Downing Street in the coming year will have to deal with worsening finances for British households, a leading London economist has said. 

Paul Dales, chief UK economist at Capital Economics, said that pressures will build on whoever is the British leader, because of the threat of consumer price inflation taking hold.

"That should have been brought into focus by this week’s news that CPI inflation rose to a 30-year high of 5.4% in December," Mr Dales wrote in a commentary.

"And while most forecasters are expecting inflation to rise to a peak of 6% to 6.5% in April, we think that it will climb to just above 7%," he said.

With inflation being driven by a rise in food inflation to a nine-year high and what could be a 50% rise in utility prices when the price cap is changed on April 1, the pressure on the government to help households is only going to grow." 

The publication of the results of the investigation next week into the so-called "partygate" at Number 10 "may well determine" Mr Johnson's fate, the chief economist said.

Meanwhile, British retail sales slumped in December, after consumers did much of their Christmas shopping earlier than usual, in November, and many people stayed at home due to the spread of the Omicron coronavirus variant, new figures show. 

Economists said the scale of the hit bolstered their expectations that the world's fifth-biggest economy shrank last month. 

• Additional reporting Reuters