UK Rate Of Inflation Drops To 10.1% In Third Fall In A Row

The UK's annual inflation rate fell for a third consecutive month in January, easing pressure on the Bank of England to raise interest rates, but it remained in double digits and close to the highest levels for 40 years.

- Richard Partington

The Office for National Statistics said annual inflation as measured by the consumer prices index fell to 10.1%, continuing a decline from 10.5% in December and its recent peak of 11.1% in October. City economists had forecast a drop to 10.3%.

The fall was driven by the drop in petrol and diesel prices, as well as air and coach travel prices falling back after a steep rise in December. Restaurant and takeaway prices also fell month on month.

The ONS figures come as the Bank considers whether further rate rises are warranted to tackle inflation, a move that would add to pressure on borrowers after 10 successive rate increases in the past 18 months.