UK inflation falls but food prices continue to rise

For a second month in a row, price rises in the UK have slowed but the cost of food kept inflation at a 40-year high.

Inflation fell to 10.5% in the year to December from 10.7% in November. 

Petrol and diesel costs also eased last month but food prices – including milk, cheese and eggs, continued to soar. 

Restaurant and hotel prices also rose in December along with a record rise in airfares. 

Cost of living crisis 

Food prices rose 16.8% in the year to December, according to the Office for National Statistics (ONS). 

Basic foods such as milk, cheese and eggs saw the biggest increases but there were also increases for sugar, jam, honey, chocolate and soft drinks. 

Some analysts believe the cost of living may now start to ease.

But at 10.5%, UK inflation is still way above the 2% target the Bank of England is charged with meeting. 

Jeremy Hunt said while any fall in inflation was welcome, it is important for the government to bring it down further. 

PM Rishi Sunak has promised to halve inflation this year, but many forecasters have predicted this will happen as the cost of energy falls. 

“High inflation is a nightmare for family budgets, destroys business investment and leads to strike action, so however tough, we need to stick to our plan to bring it down,” Mr Hunt said.