The cost of living could rise at its fastest rate for 30 years, the government’s forecaster has warned.

Its latest forecast says inflation, which measures the change in the cost of living over time, is set to jump from 3.1% to an average of 4% in 2022.

However, the Office for Budget Responsibility (OBR) says figures released since its report was compiled suggest inflation could hit almost 5%.

The chancellor acknowledged that household budgets are strained.

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