UK inflation fell to 3% in the year to January, down from 3.4% in December, according to figures released today by the Office for National Statistics (ONS). The decrease was driven by falling motor fuel costs and, surprisingly, a reduction in airfares, the ONS reported.
The average price of petrol fell by 3.1p per litre between December 2025 and January 2026, a contrast to the 0.8p increase seen over the same period last year. This decline in fuel prices contributed significantly to the overall easing of inflationary pressure.
Airfares, traditionally a factor pushing inflation upwards in December and January, exhibited a different pattern this year. The ONS noted that the usual seasonal increase in December 2024 was the third-lowest since monthly price collection began in 2001. This resulted in a smaller-than-normal decrease in January 2025, and ultimately contributed to the overall drop in inflation.
The change in flight patterns may be linked to the timing of return flights for the Christmas and Latest Year period. The ONS observed that in December 2024, return dates for European flights fell on Christmas Eve, and for long-haul flights on New Year’s Eve, potentially impacting demand and pricing.
Beyond transport costs, changes in food prices also played a role. Food prices fell overall in January, with meat, bread, and cereals being key contributors to this downward trend.
ONS chief economist Grant Fitzner highlighted the combined effect of these factors, stating that lower petrol prices and falling airfares were “downward drivers” of the inflation rate. He also noted the impact of lower food prices, particularly for bread and cereals and meat, though these were partially offset by increased costs for hotel stays and takeaways.
The latest inflation figure represents the lowest rate since March of last year, when prices rose by 2.6% annually. The Bank of England will next meet in February to set interest rates, with the latest data likely to inform their decision-making process.
