Annual consumer price inflation (CPI) eased slightly to 10.1% in January 2023 - down from 10.5% in December 2022, according to the latest figures from the Office for National Statistics (ONS).
This was driven primarily by falling fuel costs and a dip in restaurant, café and takeaway prices. Transport costs also eased by 0.5% in January, following a steep rise the month before.
However, while Chancellor Jeremy Hunt welcomed the fall in inflation, he also warned that "the fight is far from over".
Rising food costs and energy bills still remain the main drivers of CPI. Annual food inflation was 16.7% in January, while energy prices soared by 50.7%.
Alcoholic beverages and tobacco prices also increased to 5.1% in the year to January, compared to only 3.7% in the year to December.
The conflict in Ukraine is also fueling high inflation rates, with supply chain problems exacerbating the cost of energy and energy-intensive goods.
Speaking on the figures, ONS chief economist Grant Fitzner said:
"There are further indications that costs facing businesses are rising more slowly, driven by falls in crude oil, electricity and petroleum prices. However, business prices remain high overall, particularly for steel and food products."
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