In a significant economic shift, the United Kingdom's inflation rate decelerated to its lowest point in almost a year during January, primarily due to reductions in petrol prices and a moderation in the cost of various everyday groceries. However, this overall easing was counterbalanced by accelerating price rises in sectors such as entertainment and hospitality, highlighting a mixed picture for consumers.
Key Drivers of the Inflation Slowdown
According to the latest Consumer Prices Index (CPI) data released by the Office for National Statistics (ONS), the most notable contributor to the decline was a sharp slowdown in air travel costs. In December 2025, air fares had surged by 11.0% compared to the previous year, but by January 2026, this increase had plummeted to just 0.6%. Similarly, bus and coach ticket prices rose by only 0.9% year-on-year in January, down from a 5.8% annual rise the previous month.
Petrol and diesel prices also played a crucial role, with the average cost of petrol falling by 2.8% and diesel by 1.1% compared to a year earlier. This reflects recent decreases at fuel pumps across the nation. Additionally, household appliances like refrigerators, freezers, irons, cookers, washing machines, and dryers all recorded lower average prices in January than 12 months prior.
Grocery Price Trends
While most grocery items remain more expensive than they were a year ago, the rate of price increases has slowed considerably for many staples. For instance, butter prices rose by just 1.4% year-on-year in January, a stark contrast to the 8.9% increase seen in December. Other items such as coffee, crisps, meat, chocolate, eggs, and tea all experienced an easing of inflation in January compared to the previous month.
Notable examples include coffee, which saw a year-on-year rise of 6.2% in January, down from 13.7% in December, and crisps, which increased by only 0.9% compared to 3.7% previously. Furthermore, prices fell faster year-on-year in January for items like rice, yoghurt, and toys and games, providing some relief to household budgets.
Areas of Accelerating Inflation
Despite the overall slowdown, certain sectors witnessed a sharp acceleration in price rises. The most significant upward pressure on inflation came from entertainment costs, with tickets for cinemas, theatres, and concerts soaring by 10.2% year-on-year in January, up from a 3.7% increase in December.
Other areas experiencing faster price growth included entry fees to museums, libraries, and zoos, which rose by 7.1% compared to 5.8% in December, and the average cost of staying in hotels, motels, or similar accommodation, which increased by 0.4% following a 1.0% drop the previous month. Additionally, price rises accelerated for margarine, whole milk, pasta and couscous, soft drinks, and fruit, indicating ongoing pressures in specific food categories.
Comparative Inflation Data
Below is a summary of how inflation has eased or accelerated for selected items, based on ONS CPI data:
- Passenger air travel: December up 11.0%, January up 0.6%
- Refrigerators and freezers: December up 5.5%, January down 4.2%
- Butter: December up 8.9%, January up 1.4%
- Coffee: December up 13.7%, January up 6.2%
- Cinemas, theatres, concerts: December up 3.7%, January up 10.2%
- Museums, libraries, zoos: December up 5.8%, January up 7.1%
This data underscores the complex dynamics at play in the UK economy, with consumers facing a blend of relief and continued financial strain across different spending categories.
