Inflation failed to meet analysts’ expectations of a drop throughout January, marking the 12th consecutive month its been above target.
According to new data from the Office for National Statistics (ONS), the Consumer Price Index (CPI) rate of inflation remained stayed at December’s three per cent.
This came slightly above expectations that it would drop to 2.9 per cent, after December saw a relief from the 3.1 per cent inflation a month prior.
Food price inflation also dropped 0.1 per cent over the month thanks to large falls in the cost of meat, oil, cheese, milk and eggs.
This marks a welcome slowdown following continually rising prices since 2016.
January’s inflation continued to be driven by clothing inflation, having seen a weaker drop than December at 3.7 per cent.
“Economists have been expecting inflation to gradually fall back to the two per cent target over the coming year or so, starting today with a drop to 2.9 per cent,” Hargreaves Lansdown’s senior economist Ben Brettell said.
“But in fact the rate remained at three per cent, with price rises driven by clothing, footwear and recreational goods/services. Inflation’s now been above target for 12 straight months.
“Persistent inflation also has implications for the UK’s ongoing cost-of-living squeeze. Wage growth is currently running at 2.5 per cent, so the spending power of pay packets is still falling in real terms.
“We’ll be looking for an increase when the ONS reports next week. The Bank of England has said it expects pay growth to accelerate in 2018, and this is yet another reason higher interest rates are on the table.”