Official data from the Office for National Statistics (ONS) shows inflation in the UK saw a higher-than-expected jump to 3% in the year to January, up from 2.5% in December and the fastest pace for 10 months.
The largest upward contributions to the monthly change in the Consumer Prices Index (CPI) figure came from transport, food and drink, and private school fees.
Annual food and non-alcoholic beverage inflation accelerated to 3.3%, up from 2.0% in December. This is the highest annual rate since March 2024. On the month, prices rose by 0.9%.
There were upward contributions from 7 of the 11 food and non-alcoholic beverages classes used by the ONS. This included meat; bread and cereals; fish, milk, cheese and eggs; sugar, jam, honey, syrups, chocolate and confectionery; coffee, tea and cocoa; and mineral waters, soft drinks and juices.
Many businesses have warned that tax rises coming into effect in April will result in prices going up again to cover the increased costs. Sarah Coles, head of personal finance at Hargreaves Lansdown, said the threat of higher wage bills for supermarkets and food producers meant there was “every chance” the January spike in food inflation would not be the last.
Balwinder Dhoot, Director of Industry Growth and Sustainability at The Food and Drink Federation (FDF), noted that rising energy and water bills, as well as higher commodity prices, like dairy and cocoa, are all having an impact on production costs.
She added: “Unfortunately, this month isn’t likely to be a flash in the pan for rising food and drink prices. We’re yet to see the full impact of increasing labour costs, with changes to both National Minimum Wage and National Insurance Contributions coming into force in April, and we expect to see this filter through to shoppers over the coming year. We urge government to work with industry to simplify regulation and bring business costs down to help protect consumers from rising prices.”
