Official figures released by the Office of National Statistics (ONS) show that inflation in the UK remains over 10%. This is despite the level dropping slightly from 10.5% to 10.1%.
The level of inflation has falled for the fourth consecutive month. The figure was 11.1% back in October 2022.
The ONS works out the level of inflation by analysing the price of hundreds of everyday items we all use. When inflation falls, it means the price of these items is rising at a slower rate rather than prices decreasing.
This latest drop in inflation is largely related to the price of fuel and the cost of restaurants and hotels slowing down. However, the figure was offset with a rise in other areas including alcohol and tobacco as well as food and nonalcoholic beverages.The ONS also said food inflation remained high at 16.7% - and is one of the main drivers of overall inflation, along with energy bills.
According to the ONS, prices of restaurants and hotel rooms rose 10.8% in the year to January 2023, down from 11.4% in the year to December 2022 (which was the highest rate since the constructed historical estimate of 11.4% in September 1991, and which was last higher in August 1991, when it was 11.8%).
The main contributor to this came from restaurant and café prices, which eased from 10.1% in the year to December 2022, to 9.4% in the year to January 2023. This was as a result of price falls between December 2022 and January 2023 (0.5% overall, compared with rises of 0.2% a year earlier), particularly for many on-sales of drinks.
In the latest report, the inflation rate for transport was 3.4% in January 2023, down for a seventh consecutive month from a peak of 15.2% in June 2022, and the lowest rate since February 2021. The main drivers behind the easing in the rate between December 2022 and January 2023 came from passenger transport services and motor fuels.