Food prices drop for first time since 2021 as inflation remains unchanged in January

The long steady rise in food prices has finally come to an end after two and a half years, ITV News Business and Economics Editor Joel Hills reports

The rate of inflation remained unchanged at 4.0% last month despite economists forecasting it would rise, the Office for National Statistics has said.

The ONS said food prices fell on a monthly basis for the first time since September 2021, and the largest downward push on inflation came from furniture and household goods.

However, inflation still remains well above the Bank of England’s 2.0% target.

ONS chief economist Grant Fitzner said: “Inflation was unchanged in January, reflecting counteracting effects within the basket of goods and services.

“The price of gas and electricity rose at a higher rate than this time last year due to the increase in the energy price cap, while the cost of second-hand cars went up for the first time since May.

“Offsetting these, prices of furniture and household goods decreased by more than a year ago and food prices fell on the month for the first time in over two years.

“All of these factors combined resulted in no change to the headline rate this month.”

Chancellor Jeremy Hunt said: “Inflation never falls in a perfect straight line, but the plan is working; we have made huge progress in bringing inflation down from 11%, and the Bank of England forecast that it will fall to around 2% in a matter of months.”

Shadow chancellor Rachel Reeves said: “After 14 years of economic failure working people are worse off. Prices are still rising in the shops, with the average household’s costs up £110-a-week compared to before the last election.

“Inflation is still higher than the Bank of England’s target and millions of families are struggling with the cost of living.

“The Conservatives cannot fix the economy because they are the reason it is broken. It’s time for change. Only Labour has a long-term plan to get Britain’s future back by delivering more jobs, more investment and cheaper bills.”

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