UK annual inflation slows as food price growth decelerates in January

UK consumer and producer output price inflation slowed on an annual basis, the Office for National Statistics reported on Wednesday.

On a monthly basis in January, the consumer price index showed a 0.5% decline, in line with FXStreet-cited consensus and flipping from a 0.4% rise in December.

Annually, consumer prices rose 3.0% as expected, slowing from a 3.4% rise in December.

Notably, the annual inflation rate for food and non-alcoholic beverages decelerated to 3.6% in January from 4.5% in December. Monthly, consumer prices for food and non-alcoholic beverages fell 0.1% in January, compared to a 0.9% on-month rise in January 2025.

The core consumer price index posted a 3.1% increase, also in line with consensus and slowed from 3.2%.

The input producer price index showed prices rising 0.4% on-month, as expected, against a revised 0.5% decline in December. Annually, prices decreased 0.2% compared with December’s revised 0.5% increase.

Output producer prices showed no monthly change, consensus having forecast a 0.2% rise, compared with the prior month’s revised 0.1% decrease. For the year to January, output prices climbed 2.5%, slowing from a revised 3.1% increase.

Core output prices rose 0.2% on-month against December’s revised 0.2% decrease, and inflation slowed on-year to 2.9% from a revised 3.1%.

Finally, retail prices declined 0.5% on-month in January, missing consensus for a 0.4% decrease and against December’s 0.7% rise. Annually, prices rose 3.8%, below the consensus of a 3.9% rise, and slowed from a 4.2% increase.

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