Price rises slow but UK inflation remains close to 40-year highon February 15, 2023 at 7:34 am

Price rises in the UK slowed for a third month in a row but inflation remains near a 40-year high, official figures show.

Inflation, which measures the increase in the price of something over time, fell to 10.1% in the year to January from 10.5% in December.

The drop was largely due to the price of fuel and cost of restaurants and hotels slowing.

But this was offset by rising prices of alcohol and tobacco.

Food inflation also remained high in January at 16.7% and is one of the main drivers fuelling overall inflation, along with energy bills, according to the Office for National Statistics (ONS), which published the data.

To calculate inflation, the ONS keeps track of the prices of hundreds of everyday items.

If it falls, it does not mean the prices of goods are going down, it just means prices are rising more slowly.

Some analysts have said the cost of living may now be beginning to ease after inflation hit a peak in October.

However at 10.1%, the rate of price rises is still way above the 2% target the Bank of England is charged with meeting.

Grant Fitzner, chief economist for the ONS, said the latest figures showed there were signs costs facing businesses were “rising more slowly”, but warned “business prices remain high overall, particularly for steel and food products”.

Chancellor Jeremy Hunt said also warned the “fight is far from over” on rising prices.

“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,” he said.

Although the government has pledged to halve inflation, many economists predicted it will happen naturally, as the cost of energy falls.