UK inflation dropped to 10.1% in January from 10.5% in December, driven by decreases in fuel prices and the cost of eating out.
It’s the latest sign that the cost of living may be starting to ease after inflation hit a 41-year high of 11.1% in October.
Inflation remains high, however, driven by grocery prices and energy bills.
Food prices rose by 16.7% in the year to January, a slight dip from 16.8% in December.
The cost of olive oil was up 44.6% on a year ago, largely due to a supply shortage caused by the weather, BBC News reports.
Dairy prices have also soared, with low-fat milk up 45.2%, cheese prices increasing by over 30%, and butter and egg prices up more than 20%.
“While inflation eased for the third month in a row, households are still being squeezed by high prices,” commented Helen Dickinson, chief executive of the British Retail Consortium. “The cost of food remains elevated, with the ripple effect from the war in Ukraine pushing up the price of food due to the knock-on increases from high fertilizer and energy prices. So as Christmas discounts faded away, households will have felt the pressure in their weekly grocery shop.
“Despite this, consumers were offered some relief, as the prices of petrol and diesel fell. In addition, clothing and footwear inflation eased as retailers offered bigger discounts in the January sales.”
Dickinson added that retailers are “committed to doing everything they can” to keep the cost of essential goods low, by expanding value ranges and offering discounts for vulnerable groups.
