Gordon Brown has ignored pleas from the licensed trade to give pubs a break and freeze duty on beer.
The Chancellor has announced that beer will rise by 1p a pint from midnight Sunday, cider by 1p a litre, wine by 5p a bottle and sparkling wine by 7p.
Duty on spirits will be frozen.
The British Beer and Pub Association, Camra and Siba had all been calling for a freeze on beer duty but their pleas fell on deaf ears.
This is a false economy for the Government as we may now see an exodus from pubs after beer prices riseCAMRA chief executive Mike Benner.
CAMRA chief executive Mike Benner said: "This is a false economy for the Government as we may now see an exodus from pubs after beer prices rise.
"This is bad news for the millions of people who enjoy British pubs but will now face a higher cost to visit them. Therefore trips to the pub will become less frequent and the revenue the Government makes from VAT will suffer.
"At a time when 56 pubs a month are closing, the smoking ban is imminent and supermarkets are selling beer at ridiculously low prices, British pubs needed a lifeline from their government and that has been denied them."
Cigarettes are to rise by 11p a packet however, VAT on nicotine patches to be cut from 17.5% to 5%.
Brown also announced that the basic rate of income tax to fall from 22p to 20p from April next year.
Sir Michael Lyons has already published his final report this morning from his independent inquiry into the future role, function and funding of local government.
In it he opens the door to a 'bed tax' which will be a blow to many pubs up and down the country which supplement their income by offering rooms.
The report says in the medium term the Government should "consider introducing the power to levy a tourist tax if local government makes a strong case based on local public support; this would be appropriate only in some areas."
The news will be a blow to pubs which offer bed and breakfast.