Economy

UK inflation rate falls to 10.1% in January

Consumer price growth drops by slightly more than expected, moving away from October’s 41-year high of 11.1 per cent

While any fall in inflation is welcome, the fight is far from over, finance minister Jeremy Hunt said.

Wed Feb 15 2023 - 07:35

British consumer price inflation fell by more than expected to 10.1 per cent in January from December’s 10.5 per cent and there were also drops in underlying measures of inflation that are being closely watched by the Bank of England, official data showed.

Economists polled by Reuters had forecast that the annual CPI rate would drop to 10.3 per cent in January, moving further away from October’s 41-year high of 11.1 per cent but still eroding the living standards of households.

Core CPI - which excludes energy, food, alcohol and tobacco - fell to 5.8 per cent in January from December’s 6.3 per cent, the Office for National Statistics said on Wednesday.

Sterling fell against the US dollar and the euro after the data was published.

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Earlier this month the Bank of England said it saw signs that the surge in consumer prices had turned a corner and it suggested it was close to ending its run of interest rate hikes.

Investors expect another increase in borrowing costs next month by the BoE but Wednesday’s data may add to the sense that a peak in Bank Rate is not far off.

Prices of services, which are also in the BoE’s spotlight, slowed their rise in January, rising by an annual 6 per cent compared with 6.8 per cent in December.

“While any fall in inflation is welcome, the fight is far from over,” finance minister Jeremy Hunt said.

“High inflation strangles growth and causes pain for families and businesses - that’s why we must stick to the plan halve inflation this year, reduce debt and grow the economy.” - Reuters

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