UK inflation retreats further, remains above 10%

British annual inflation dropped further last month on easing transport costs, official data showed Wednesday, but remains above 10 percent, prolonging a cost-of-living crisis that has sparked massive strikes.

Inflation around the world is easing after striking the highest levels in decades last year as the invasion of Ukraine by Russia fuelled energy and food prices.

The UK Consumer Prices Index (CPI) fell to 10.1 percent in January compared with a rate of 10.5 percent in December, the Office for National Statistics (ONS) said in a statement.

UK inflation has dropped in recent months from a peak of above 11 percent in October, which was reached also on shortages of supplies of goods and services as economies reopened from Covid lockdowns.

With elevated inflation eroding the value of wages, Britain is facing its biggest strikes by public and private sector workers in more than a decade.

“These latest figures show the cost-of-living crisis is still pummelling workers’ pay packets,” said Sharon Graham, general secretary at major British union Unite.

“Unite will continue to fight for and win better wages in the face of this crisis,” she added in a statement.

A separate measure of UK inflation -- the retail prices index -- was unchanged at 13.4 percent in January, the ONS said.

The RPI includes mortgage interest payments and is used by unions and employers when negotiating wage increases. Finance minister Jeremy Hunt welcomed the easing CPI inflation figure but cautioned that “the fight is far from over”.

He added in a statement: “High inflation strangles growth and causes pain for families and businesses -- that’s why we must stick to the plan (to) halve inflation this year, reduce debt and grow the economy.”

Official data last week showed Britain narrowly avoided recession in 2022, but the risk of a prolonged contraction remains for this year according to analysts.