EconomyNews

Inflation hits 30-year high amid rising cost of living

However, the Consumer Prices Index (CPI) fell on a monthly basis by 0.1% in January 2022, compared with a fall of 0.2% in January 2021

Inflation rose by 5.5% in the 12 months to January 2022, up from 5.4% in December 2021, marking the highest annual inflation rate since May 1992.

According to the Office for National Statistics (ONS), the largest upward contributions to the change in the inflation rate between December 2021 and January 2022 came from clothing and footwear, which increased the rate by 0.14% in the period.

Additionally, the 2.9% fall in prices in January 2022 was smaller than the 4.8% fall a year earlier. This is the smallest monthly fall for clothing and footwear prices in January since the National Statistic series began in February 2005, and the smallest since 1990 in the constructed historical series when it stood at negative 2.1%.

The upward pressure was spread mainly across men’s and women’s garments at 0.04% and 0.05% respectively, and women’s footwear at 0.04%.

Prices for furniture and household goods also fell year-on-year in January, adding 0.04% to the overall 12-month inflation rate. Prices fell by 0.5% on the month, compared with a fall of 1.6% a year ago, and the effect was mainly due to glassware, tableware and household utensils hitting 0.03%.

The annual rate for this division currently stands at 8.5%, which is reportedly the highest recorded rate for this division since the series began in January 2006, and also the highest recorded rate since the start of the historical modelled data series in January 1989.

However, these were partially offset by large downward contributions to change from restaurants and hotels, and transport. In addition, CPI fell on a monthly basis by 0.1% in January 2022, compared with a fall of 0.2% in January 2021.

Grant Fitzner, ONS chief economist, said: “Inflation ticked up again in January, reaching a near 30-year high.

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.”

He added: “The rising costs of some household goods and increases in rents also pushed up inflation. However, these were partially offset by lower prices at the pump, following record highs at the end of 2021.

“Some annual changes this year are affected by last year’s lockdown, when many services were unavailable.”

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