Inflation rose to a six-year high of 3.1% in November as retailers struggled against a squeeze on shoppers finances in the run-up to Christmas.
The Office for National Statistics (ONS) revealed that wages were growing at a rate of just 2.2% as airfares and computer games contributed to the increase.
Not only does the trend see households hampered by a reduction in disposable income but car retailers will be keeping a close eye on the rise as the likelihood of further interest rate rises in 2018 in 2018 could affect the affordability of finance at a time when margins are being squeezed ever tighter.
Last month the Bank of England raised interest rates from 0.25% to 0.5% in their first increase in a decade in a measure aimed at tackling rising inflation.
The BBC reported that the governor of the Bank of England, Mark Carney, would now be writing to the Chancellor of the Exchequer, Philip Hammond, to deliver his strategy to bring inflation back to its 2% target.
Richard Lim, chief executive at Retail Economics, told the BBC that the rise in inflation had come "at precisely the wrong time for retailers".