UK inflation rises to 3% as households feel the squeeze
19 February 2025, 07:04 | Updated: 19 February 2025, 09:04
The UK's inflation rate has risen to 3% according to the latest figures, marking the highest level seen in nearly 10 months.
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The latest figure, released on Wednesday by the Office for National Statistics (ONS), marks a rise of 0.5 per cent in the 12 months to January 2025.
The consumer prices index (CPI) stood at 2.5% in December.
Economists were expecting to see higher inflation, with the latest figure reflected in the higher cost of day-to-day purchases.
Following the news, Chancellor of the Exchequer, Rachel Reeves, said she "knows that millions of families are struggling".
“Getting more money in people’s pockets is my number one mission," the Chancellor said.
"Since the election we’ve seen year on year wages after inflation growing at their fastest rate – worth an extra £1,000 a year on average – but I know that millions of families are still struggling to make ends meet.
"That’s why we’re going further and faster to deliver economic growth," she continued.
"By taking on the blockers to get Britain building again, investing to rebuild our roads, rail and energy infrastructure and ripping up unnecessary regulation, we will kickstart growth, secure well paid jobs and get more pounds in pockets.”
The Bank of England expects consumer price inflation to peak at 3.7% in the third quarter of the year.
The figure is almost double the government's 2% target.
Economists have said higher independent school fees, linked to the scrapping of the VAT exemption by Labour, have been a factor in pushing up inflation.
The figure is also thought to be driven by higher energy costs and regulated tariffs for household utility bills, with transport, food and non-alcoholic drinks also buoying the figure.
Food and drink prices rose by nearly 3.3% compared to 2% in December.
"Inflation increased sharply this month to its highest annual rate since March last year," ONS Chief Economist Grant Fitzner.
"This rise was driven by air fares not falling as much as we usually see at this time of year, partly impacted by the timing of flights over Christmas and New Year.
He added: "This was the weakest January dip since 2020."
