Inflation rises more than expected as meat, milk, eggs and cheese become more expensive

Inflation in services – closely watched by the Bank of England – rose to an annual rate of 5% in January, up from 4.4% in December. Goods inflation rose to 1% from 0.7%.

Luke Bartholomew, deputy chief economist at abrdn, said:

Inflation was always going to jump higher today, but the size of the increase is a bit of disappointment. However, measures of underlying inflation were actually a bit more encouraging, with services inflation coming in slightly weaker than expected.

While key Bank of England policymakers recently sounded more concerned about the growth rather than inflation outlook, there is probably not enough in this report to materially move the dial on the near term outlook for policy.