Inflation remained steady at 2.8% in the month of March according to latest figures from the Office for National Statistics (ONS).
The figure, as measured by the Consumer Price Index, remained the same as the figure recorded for February and the highest level recorded since May 2012.
Rising cost of living
The CPI measures the rising cost of living by analysing the rising cost of a diverse basket of goods and services from month to month. The ONS said that the greatest price rises were seen in the recreation and culture sector for goods such as audio-visual equipment, newspapers, books and stationary.
In the Inflation report released in February the Bank of England said that it expected inflation to remain above its target of 2% until 2016.
Salary increases have failed to keep pace with rises recorded as 1.3% (excluding bonuses) in the year leading up to December 2012, according to labour market statistics from the ONS.
Continuing high levels of inflation could also have a negative impact on more vulnerable sections of society such as pensioners.
Vince Smith-Hughes, retirement expert at Prudential said:
"With inflation staying high, pensioners' budgets remain incredibly strained. They are particularly vulnerable as they spend a proportionately higher amount of their income on items such as food and fuel which are seeing bigger price rises. Figures from the ONS show energy bills cost pensioner households an average of £1,583 per year, making it their single largest expense.
"It's important that those retiring take the impact of inflation into account when planning their future income. Contacting a financial adviser or retirement specialist is essential when choosing an annuity as the inflation risk can erode the spending power of retirement income.”
The CPI does not take into account house price rises.
House price inflation
According to separate figures released by the ONS today, house price inflation has slowed to 1.9% in the year leading up to February 2013.
However the data showed significant differences in house price inflation between different regions of the UK. House price inflation hit 5.9% in London, with a year on year increase of 2.1% across England and a 4.1% increase seen in Wales.
These rises were offset by declines of 1.2% and 7.7% in Scotland and Northern Ireland respectively.