London Daily

Focus on the big picture.
Saturday, Jun 20, 2026

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
Long-Term Economic and Political Effects of Brexit Continue to Shape UK Policymaking
Digital Disinformation Emerges as a Growing National Security Challenge in the United Kingdom
Britain's Dependence on Global Energy Routes Drives Push for More Resilient Supply Chains
Rising Energy Costs Continue to Threaten Britain's Cost-of-Living Recovery
Concerns Grow Over Far-Right Organizing and AI-Driven Online Radicalization in Britain
UK-Led Global Partnerships Conference Calls for Reform of International Development Finance
Middle East Tensions Continue to Weigh on UK Business Confidence
Reports of Middle East Peace Deal Ease Pressure on UK Energy Prices
UK Warns Middle East Conflict Could Worsen Global Food Insecurity
UK Economy Loses Momentum After Strong Start to 2026
Bank of England Holds Interest Rates at 3.75% Despite Easing Inflation
Brexit's Legacy Remains Deeply Divisive Ten Years After the UK Voted to Leave the European Union
International Anti-War Conference Opens in London as Debate Over European Rearmament Intensifies
UK Health Authorities Introduce Drug Price Concessions Amid Record NHS Medicine Shortages
Sir David Attenborough Supports Sherwood Forest Conservation Efforts After Loss of Major Oak
Aardman Animations Marks 50 Years With Major Exhibition in Bristol
Drax Cleared After Investigation Into Wood Pellet Sourcing Practices
Jaguar Land Rover Shifts Toward Hybrid Vehicle Production for US Export Strategy
UK Police Arrest Liberal Democrat MP Cameron Thomas on Suspicion of Assault
Health Concerns Grow Over Elevated Kidney Cancer Rates Near Lancashire PFAS Factory
Royal Navy F-35 Jets Conduct First NATO Air Warfare Exercise from Finnish Airspace
UK NHS Issues Price Concessions for Medicines Amid Severe Drug Shortages
Heathrow Third Runway Project Faces Sharp Downward Revision in Expected Economic Benefits
Amber Heat Warning Issued Across Parts of England and Wales as Temperatures Rise
Train Collision Near Bedford Disrupts UK Rail Network and Leaves Multiple Injured
Bank of England Data Suggests Brexit Has Reduced UK Economic Output by Around Six Percent
UK Borrowing Costs Hold Near 4.8 Percent as Political Uncertainty Fuels Market Pressure
Andy Burnham Emerges as Front-Runner to Succeed Keir Starmer After Landslide Makerfield Victory
Prime Minister Keir Starmer Faces Mounting Pressure to Resign After Labour By-Election Defeat in Makerfield
Payment Fraud Losses Reach £1.28 Billion and Raise National Security Concerns
Lending to Small Businesses Climbs to Highest Level Since Late 2024
Middle East Conflict Clouds UK Economic Recovery Despite Strong First-Quarter Growth
Bank of England Moves to Simplify Capital Rules for Smaller Lenders
UK Government Fast-Tracks National Security and Cyber Resilience Legislation
Ofcom Investigates Telegram Over Alleged Role in Organising Arson Attacks
MPs Press Fujitsu to Speed Compensation for Post Office Horizon Victims
Bank of England Delays Final Basel III Implementation Changes to Support UK Banking Competitiveness
Pound Falls as Political Uncertainty and Bank of England Signals Weigh on Markets
0Andy Burnham Wins Makerfield By-Election and Emerges as Main Challenger to Keir Starmer
Dorset Council Tests AI Tools to Streamline Local Planning Applications
UK Researchers at Kew Gardens Use AI to Speed Up Identification of Threatened Plant Species
UK Gilt Yields Ease Toward 4.8% as Inflation and Labour Market Data Weigh on Bonds
Bank of England Data Shows Resilient SME Lending Despite Economic Slowdown
UK Finance Reports Weakening Services Activity as Business Confidence Softens
UK Introduces Mandatory Internal Complaints Process Under Data Use and Access Act
Bank of England Governor Andrew Bailey Flags Geopolitical Uncertainty as Key Risk to Inflation Outlook
Bank of England Holds Interest Rates at 3.75% as Policymakers Signal Cautious Stance on Inflation Risks
Cornwall Clergy Raise £40,000 for Church Repairs Through Everest-Themed Charity Challenge
UK Business and Social Landscape Reflects Strain From Geopolitical and Domestic Pressures
Tensions Grow in UK Over Sikh Kirpan and Religious Symbolism in Public Debate
×