The rising cost of liquor may have contributed to a surprising increase in the new inflation figures

THE rising cost of spirits may have contributed to a surprise rise in today's latest inflation figure.

Economists expect the consumer price index to rise from 4 percent in December to 4.2 in January.

Some of that increase will be due to rising prices of favorite drinks, with so-called gin inflation set to almost double in the six months to December.

The price of spirits rose five percent over the year to July, but by December liquor inflation had risen to 8.9 percent for the year.

Beverage makers said the price increases were due to the 10.1 percent excise tax hike imposed by the government in August.

British spirits such as gin and Scotch whiskey are the most highly taxed category of alcohol in Britain, with 80 percent of the price of a bottle claimed by the Treasury.

The liquor industry said it was time for a duty cut.

Co-founder of Copper Rivet Distillery and spokesperson for the UK Spirits Alliance, Stephen Russellf, said: “The Chancellor must cut duty in the March Budget to avoid further unnecessary pressure on household budgets.

“Reducing excise duties would be good news for consumers struggling with rising costs, but also good news for a hospitality sector that deals almost daily with news of locations closing with few visitors.”

He added that this would be good news for distillers after last year's record tax increase.

More than £12 in duty is charged on the average price of three UK one-litre bottles of spirits, but in France it is £6.45. and in Spain it is only £3.32.