// Higher clothing and footwear prices pushed living costs up again last month, the ONS says
// The Bank of England has warned that consumer price inflation could peak at about 7.25% by April as surging energy prices feed through to consumers
Higher clothing and footwear prices have pushed living costs up again, with inflation remaining at 30-year high last month.
Consumer prices surged by 5.5% in the 12 months to January, up from 5.4% in December, the Office for National Statistics (ONS) said.
Since pandemic restrictions were eased last year, businesses have faced higher wage, shipping and energy costs which they have passed on to customers.
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The ONS said retailers offered fewer sales and discounts in the New Year, compared to the steeper discounts seen last January.
ONS chief economist Grant Fitzner said: “Clothing and footwear pushed inflation up this month and although there were still the traditional price drops, it was the smallest January fall since 1990, with fewer sales than last year.”
The Bank of England has warned that consumer price inflation could peak at about 7.25% by April as surging energy prices feed through to consumers.
The cost of household staples also increased in the year to January, with pasta prices rising 15% and margarine soaring 37%, putting a squeeze on household budgets.
Linda Ellett, Head of Consumer Markets, Retail and Leisure, KPMG UK, said: “As costs rise, consumers are having to decide whether each purchase is a priority to them, if they need to try to find it cheaper, and whether it has to leave the basket or be cancelled as a subscription.
“With energy prices and National Insurance contributions set to rise in the near future, this scrutiny of spend will only increase for more people and more purchases.
“Whilst it’s a tough landscape for consumers, it’s also challenging for many businesses that sell to them, as they face their own inflationary pressures and decisions about whether and how to raise prices to cover costs, or to discount to try to hold market share and customer loyalty.”