Overall, UK inflation eased fractionally, from 10.7 per cent to 10.5 per cent, due in part to falling petrol and diesel prices, with the average petrol price down by 8.3 pence per litre month-on-month in December.

There was little respite for households, however, with the consumer prices index (CPI) still in double digits and food and drink inflation soaring yet again, to 16.8 per cent in December up from 16.4 per cent in November, marking the highest level since September 1977.

Prices also rocketed across restaurants and hotels as hospitality firms were forced to pass on their own surging costs, with inflation across this sector jumping to 11.3 per cent in December – the highest level for more than 31 years.

A shopper walking through the fresh meat aisle in a branch of Waitros. The price of basic groceries such as butter, milk and cheese went up 30% year-on-year at some supermarkets in December, new figures show.

Grant Fitzner, chief economist at the ONS, said: “Inflation eased slightly in December, although still at a very high level, with overall prices rising strongly during the last year as a whole.

“Prices at the pump fell notably in December, with the cost of clothing also dropping back slightly.”

“Food costs continue to spike, with prices also rising in shops, cafes and restaurants,” he added.

CPI has eased since the eye-watering 41-year high of 11.1 per cent seen in October last year, when soaring energy bills pushed up the cost of living.

It is expected to fall throughout this year as the cost crisis takes its toll on the economy, with recession looming large.

The Government has also pledged to help halve inflation by the end of 2023.

Chancellor Jeremy Hunt said: “High inflation is a nightmare for family budgets, destroys business investment and leads to strike action, so however tough, we need to stick to our plan to bring it down.

“While any fall in inflation is welcome, we have a plan to go further and halve inflation this year, reduce debt and grow the economy – but it is vital that we take the difficult decisions needed and see the plan through.”

But Labour hit out at the Government’s economic policies and said inflation was still five times the 2 per cent target.

Energy costs are also set to surge once again in the spring, when the Government scales back its support package, capping gas and electricity bills at £3,000 a year, up from £2,500 currently.

Business groups also raised concerns over the impact of high inflation on firms across the UK, with consumer spending being reined in due to the cost crisis and Government support for companies also set to be trimmed considerably from April.

The British Chambers of Commerce said that while the peak of inflation appears to have passed, rising prices were still “far and away the top issue” affecting businesses.

Economists believe falling levels of inflation will not prevent the Bank of England from raising interest rates again in February, with some forecasting a raise to four per cent.

But Martin Beck, chief economic adviser to the EY ITEM Club, said he believes rates will peak at 4 per cent.

“Given the prospect of inflation falling through 2023 and into next year, the MPC (Monetary Policy Committee) may be mulling rate cuts by the end of 2023,” he added.

The latest ONS data showed that annual fuel price inflation dropped back sharply to 11.5 per cent in December from 17.2 per cent in November.

Food prices hit another 45-year high as cost of living crisis deepens