Inflation falls, but cost-of-living gap grows 15 February 2023 CPI inflation fell for the third consecutive month to 10.1 per cent in January, but the inflation rates experienced by rich and poor households grew to 2.9 percentage points, the Resolution Foundation said today (Wednesday) in response to the latest ONS prices data. Services inflation – which is a better indicator of domestically generated inflation than headline inflation – also fell in January (from 6.8 per cent to 6.0 per cent), easing some of the fears that persistent inflation could be taking hold, especially with private sector wage growth falling in recent months. However, with transport and fuel costs falling, while energy and food price inflation remaining high, the cost-of-living gap between the richest and poorest households grew to 2.9 percentage points. The poorest tenth of households experienced an inflation rate of 11.7 per cent, compared to just 8.8 per cent for the richest tenth of households. New Foundation analysis published today shows that the Chancellor can further accelerate future fall in inflation (by around one percentage point), and prevent energy bills rising this April, by delaying increase in the Energy Price Guarantee by three months in his upcoming Budget (at a cost of £3 billion). James Smith, Research Director at the Resolution Foundation, said: “Inflation continued to fall in line with the Bank’ expectations in January, but remained higher than many other advanced economies at double-digit levels. “The fall in services inflation, coupled with evidence yesterday that private-sector wage growth is easing, should allay some of the fears in the Bank that persistent inflation has taken hold. “However, with energy and food prices remaining stubbornly high, poorer households continue to face far higher living costs than richer families.
