Price inflation in the UK continues to slow, despite remaining in double-digit territory.

The latest Consumer Prices Index (CPI) measure of price inflation for the twelve months to January shows prices rising at 10.1%, down from 10.5% a month earlier.

Although price Inflation is coming down the cost of living is still increasing at its fastest pace in 40 years.

However, it’s the third consecutive month inflation has slowed, signalling that price inflation in the UK might have peaked after the 11.1% recorded in the twelve months to October.

The Office for National Statistics (ONS) explained that the fall in rising inflation was primarily due to the prices of fuel, restaurants and hotels slowing.

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However, slowing inflation was partly offset by rising prices for alcohol and tobacco.

The cost of food is also continuing to rise, with food inflation recorded at 16.7% in January. Food prices and energy bills are continuing to drive higher price inflation.

Grant Fitzner, chief economist for the ONS, said:

“Although still at a high level, inflation eased again in January.

“This was driven by the price of air and coach travel dropping back after last month’s steep rise.

“Petrol prices continue to fall and there was a dip in restaurant, cafe and takeaway prices.

“The cost of furniture decreased by more than this time last year, in line with traditional New Year discounting. These were offset by rising prices for alcohol and tobacco, following on from seasonal price cuts in December and a more subdued rise at the same time last year.

“There are further indications that costs facing businesses are rising more slowly, driven by falls in crude oil, electricity and petroleum prices.

“However, business prices remain high overall, particularly for steel and food products.”
Responding to the latest data, Chancellor Jeremy Hunt said:

“While any fall in inflation is welcome, the fight is far from over.

“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.”

The latest ONS figures will likely ease the pressure on the Bank of England’s Monetary Policy Committee to continue much further on its path of monetary tightening.