Mothers on the high street
Media playback is unsupported on your device
Video

Has the VAT increase pushed up the cost of living?

The UK Consumer Prices Index (CPI) annual inflation rate rose to 4% in January, up from 3.7% in December.

Retail Prices Index (RPI) inflation - which includes mortgage interest payments - rose to 5.1% from 4.8%.

The rise will put further pressure on the Bank of England to lift interest rates to curb accelerating inflation.

The BBC's Simon Gompertz asks if the increase in VAT has helped push the cost of living even higher.

  • 15 Feb 2011