London Daily

Focus on the big picture.

UK inflation dips slightly to 10.1%

UK inflation dips slightly to 10.1%

Prices have been rising since COVID lockdowns and Russia's invasion of Ukraine but there are signs inflation may have peaked in the UK.

Inflation has eased slightly to 10.1% from 10.5% the previous month as fuel price rises slowed.

Decreased transport costs were one of the main drivers of the lower inflation rate, along with restaurants and hotels, as prices dropped in cafés and restaurants from the December Christmas period to January.

The rate eased in January from December in the latest sign that the UK might have seen the worst of inflation after a 41-year high of 11.1% was recorded in October.


The reduction is bigger than economists polled by the Reuters news agency had expected but is in line with a forecast by the Bank of England's money policy committee earlier this month.

Inflation - the rate at which prices rise - had remained high as food prices continued to increase faster than the regular rate of inflation. Food inflation hit 16.8% in December but the latest figures suggest that may have peaked. The rate of food inflation dipped slightly to 16.7%.

Industrial food production is dependant on energy and so is vulnerable to price rises.

Greater price rises in alcohol and tobacco partially offset the inflation suppressing effects of slower transport and hotel and restaurant price rises.

Inflation began to increase in late 2021, when supply chain problems linked to COVID-19 lockdowns and the associated worker shortages meant demand for goods could not be met.

Russia's invasion of Ukraine exacerbated the problem as many countries, particularly those in Europe, scrambled to find other energy sources and reduce their use of Russian gas. This pushed up the cost of energy and many other goods as a result.

Responding to the figures, Chancellor Jeremy Hunt said any decline in inflation is welcome but "the fight is far from over".

He said: "High inflation strangles growth and causes pain for families and businesses - that's why we must stick to the plan to halve inflation this year, reduce debt and grow the economy."

But Labour's shadow chancellor, Rachel Reeves, said: "With inflation still close to a 40 year high, people will be asking if 13 years of Tory government has left them and their family feeling better off? The answer will be no.

"Despite Britain's enormous potential, in April households will be hit by another economic blow when energy prices go up.

"Labour would be bringing in a proper windfall tax on oil and gas giants now to stop energy bills going up in April.

"Our long-term plan to sprint to clean power and insulate 19 million homes will keep bills low for the future too, and get our economy growing."
Newsletter

Related Articles

0:00
0:00
Close
Prince William to End Feudal Land Restrictions in Duchy of Cornwall, but Controversies Remain
British police appear unprepared to deal with usual suspects
Russia's Ballistic Blitz on Kyiv Sends Shockwaves Through Global Stability
Multiple Tragedies and Tensions Mark Global Events: A Closer Look
Elon Musk's AfD Endorsement Ignites Controversy from neo-Nazis who accuse the AfD of being what they themselves are
Ukraine Claims Unprecedented Russian Losses: The Truth Behind Wartime Statistics
Federal Reserve Chair Powell: "We are prohibited from owning Bitcoin and are not seeking any changes to that law."
A Democratic congresswoman with blue and black hair is having a meltdown over "President Musk."
A sizable group of unauthorized migrants is traveling through Mexico with the aim of reaching the USA before Trump assumes office.
Beatles Reunion Electrifies London: Paul McCartney and Ringo Starr Ignite O2 Arena with Surprise Performance
Starmer's Envoy Engages Trump Team as UK Seeks Strategic U.S. Partnership
Britain's Retail Rebound Falters as Black Friday Splurge Dissipates
Bank of Japan's Bold Reckoning: A Decade of Unconventional Policy Under Scrutiny
Republican Discord Threatens Government Shutdown Amid Holiday Season
French Retiree Dominique Pellico Convicted for Recruiting 72 Men to Assault Wife Over a Decade
Putin Defends War Strategy as Global Tensions Rise
Putin Claims Progress as Tensions Rise: Conflict in Ukraine Intensifies
Putin's Paradox: Claiming Strength Amidst Sanctions and Isolation
Water as a Weapon: The Contentious Struggle for Survival in Gaza
Syria's Future: A Fight for Democracy or Another Cycle of Oppression?
UK Considers Sending Troops to Ukraine: A Strategic Move or Intensifying The Proxy War?
Renewed ISIS Threat Puts Syria’s Cultural Heritage in Peril
Escalation in Moscow: High-Profile Assassination and International Tensions Intensify
North Korean Troops in Ukraine: A New Cold War Frontier?
Ukraine's Bold Move: High-Stakes Assassination of Russian General in Moscow
Dubai's Technological Leap: Brain Chips and AI Board Members by 2025
Tragedy Strikes Wisconsin School as Shooting Claims Lives of Teacher and Student
UK's Calculated Gamble: Balancing Defense Aid to Ukraine and Domestic Demands
UK Intensifies Stranglehold on Russian Oil, but Does It Dampen Putin’s Resolve?
British Voter Endorsement of Reeves's Bold Tax Strategy
Nicola Sturgeon Warns of 'Toxic' Discourse: The Perils of Polarisation in Modern Politics
Levelling Down: How the Conservatives Underspent on Regional Revitalization
Alleged Chinese Espionage: The Entangled Web Beyond Prince Andrew
Starmer Navigates Diplomatic Tightrope Amid Chinese Espionage Revelations Involving Prince Andrew
Balancing Democracy and Disorder: The Trial of a Milkshake Incident
Royal Mail Enters New Chapter Under Czech Ownership
UK Companies Slash Jobs Amid Economic Strain
Kemi Badenoch Rekindles Flat Tax Debate Amid Inheritance Tax Uproar
Rewiring Whitehall: New Cabinet Secretary's Mandate for Change
Legal Battle Revives: Lucy Letby Seeks Fresh Appeal as Expert Evidence Faces Scrutiny
Accusations Fly as UK-China Relations Spark Tension Within British Politics
The Delicate Dance of Devolution: As English Council Elections Face Delays
The Alleged Chinese Spy at the Heart of British Royal Circles: Yang Tengbo Unmasked
Prince Andrew Withdraws from Royal Christmas Amidst Chinese Espionage Scandal
EU Takes Legal Action Against UK Over Allegedly Neglected Rights of EU Citizens
Disaster Strikes: Oil Spill in the Black Sea and Cyclone Devastation in Mayotte
Oil Tanker Disaster in the Kerch Strait: A Confluence of Environmental Catastrophe and Geopolitical Tensions
Olaf Scholz’s Gamble: The Collapse of Germany’s Coalition Government and the Path to Early Elections
Keir Starmer's 'Sycophantic' Tone: Tensions Rise Over UK-China Relations
Trump Recognizes Partial Advances in Ceasefire Attempts in Ukraine Conflict
×