Inflation: Rising prices of food and household goods pushes cost of living higher

Cost of prawns, fish fingers and salmon rises amid Brexit disruption for fishermen

Higher food prices and more expensive household goods lifted the overall inflation rate (AFP via Getty Images)

Higher food prices and more expensive household goods helped push up the overall cost of living last month, official figures show.

Prices for prawns, frozen fish fingers and fresh salmon in the opening weeks of 2020, the Office for National Statistics reported. The increase came amid widespread disruption for fish processors after the end of the Brexit transition period.

Consumer Prices Index (CPI) inflation rose to 0.7 per cent in January, up from 0.6 per cent in December and higher than the consensus forecast among economists of 0.5 per cent.

Food and non-alcoholic drink prices were up by 0.6 per cent, with pricier crisps and cauliflowers contributing to the increase.

Jonathan Athow, deputy national statistician for economic statistics at the ONS, said: "Inflation rose slightly in January, with food prices increasing.

"Household goods also pushed up prices with less discounting this year on items such as bedding and settees."

The largest contribution to rising inflation came from furniture and home furnishings, as retailers reduced their discounts on some sofas and beds.

These increases were partially offset by cheaper clothing as retailers heavily discounted items online.

Mr Athow said: "There were widespread January sales, with particular price cuts for clothing and footwear."

The price of clothing and footwear slid by 4.8 per cent for the month.

The Retail Price Index (RPI), a separate measure of inflation, increased to 1.4 per cent from 0.9 per cent in December.

The CPI, including owner-occupiers' housing costs (CPIH) – the ONS's preferred measure of inflation – was 0.9 per cent in January, up from 0.8 per cent last month.

Laith Khalaf, financial analyst at AJ Bell, said: "While the headline CPI rate is glacially cool, the debate between inflation and deflation is raging.

"Commodity prices have been creeping up, and the market seems to be buying into a global economic recovery, with cyclical stocks performing well.

"Combined with the huge amount of monetary and fiscal stimulus pumped into the economy, that suggests that inflationary pressures may be brewing."

Additional reporting by PA