That's it from us for today. But before we go, here's a quick recap:

• The latest inflation figures showed a slight dip in inflation compared with last month, falling from 10.7% in November to 10.5% in December - but the rate still remains very close to a 40-year high
• Petrol and energy costs have eased, while food prices have continued to increase, the Office for National Statistics (ONS) says
• Milk, cheese and eggs are among the products costing more and more, along with jam, sugar and chocolate
• The Bank of England's former deputy governor, Sir John Gieve, told the BBC the slight dip in inflation was "encouraging," but "a lot of the pain and hard work" to bring inflation down is "still to come".

This live page was edited by Emma Owen, Jen Meierhans and Paul Gribben. Our writers were Adam Durbin, Alys Davies, Anna Boyd and Gem O'Reilly.

Many businesses around Hawes in North Yorkshire are sceptical of the government's 'levelling up' commitment, which pledges to reduce the economic divide between poorer and wealthier parts of the country.

Laurence Beardmore, president of York & North Yorkshire Chamber of Commerce (which represents around 1,000 firms) says 'levelling up' is yet to noticeably manifest itself in the local area.

Expressing the view that it was "just a damp squib, wasn't it?", he goes on to describe the 'levelling up' agenda as "a list of things that government should be doing anyway".

Gem O'Reilly
BBC News

Data from the flat share site SpareRoom shows that UK rents reached an all-time high at the end of 2022.

The average cost to rent a room in London, for example, exceeded £900 per month, for the first time in September 2022 and has continued to rise since.

SpareRoom says the average UK room rent is increasing by 13% year-on-year.

The site said one of the reasons behind this is demand and supply - too many people searching for properties and not enough to give, which increases the value of those properties.

Image source, SpareRoom

As of December 2022, the average UK room rent was £731.

The site said demand reached a nine-year high in August 2022, but things have calmed down since then. However demand continues to outweigh supply because the number of rooms available decreased over 2022.

Matt Hutchinson, SpareRoom Director, said: “Although demand has eased since the record peaks we saw in August and September, the combined effect of low supply and the cost-of-living crisis means rents have continued to rise."

The last 12 months have seen rents across the UK hit record highs and unless new supply comes into market over the coming months, it’s hard to see those rents come down meaningfully in 2023."

Some businesses in the hospitality sector are having to adapt to survive because of the rising cost of goods and energy.

One Belfast-based restaurant has decided to rebrand from Mediterranean cuisine to a burger restaurant that will also offer takeaway service.

Tony O'Neill, owner of Buba in Belfast's Cathedral Quarter, said: "We have to work a lot smarter now to keep the businesses profitable."

Read more on the story here.

With so many bills rising where people have no choice but to pay higher prices like energy, personal finance expert Martin Lewis has offered some advice to cut down on monthly mobile phone or broadband internet bills, currently available to millions of people.

Speaking on BBC Radio 5 Live, Martin explains that most mobile and internet companies are likely to raise their charges in April.

He says many have specific policies in their contracts to hike prices by an amount based on the previous December inflation figure - in this case 10.5% - plus three to four per cent or so.

Unfortunately, for those tied into a long-term contract there is likely no way to avoid this price hike without paying a penalty charge.

But Martin advises those interested in saving money to shop around for a new deal, if they are on a rolling contract which can be broken at any time - as they could be able to find a better deal than their current provider offers.

Once you've found a deal which looks appealing, he says you can either make the switch, or use it to negotiate directly with your current service provider for a better deal.

Martin adds that most people are "massively overpaying" for the value of their phone contract in particular, with people still on high prices even after paying off the balance of the handset itself.

You can listen to Martin's advice in full on his podcast by clicking here.

Gem O'Reilly
BBC News Live reporter

The cost of living is affecting us all and causing huge implications in our lives. But what if you were a victim of domestic abuse?

The charity, Women’s Aid has highlighted that the cost of living crisis is having an impact on victims of domestic abuse.

Often coercive relationships are dictated by money and the perpetrator uses that control as a weapon, it said.

The charity told the BBC that due the cost of living crisis women are telling them they feel unable to flee abusive partnerships. It has also meant that the services aiming to help these women have a lack of financial support to host them when they arrive.

In November 2022 Women’s Aid carried out a survey to determine the impact the cost of living crisis was having across the UK on victims of domestic abuse.

More than half of Women’s Aid members (59%) told the charity they were using their reserves to cope with the crisis.

Image source, .

The cost of food including milk, cheese and eggs is keeping inflation at a 40-year high despite price rises slowing for a second month.

Inflation, which measures the rate of price rises, fell to 10.5% in the year to December from 10.7% in November.

Petrol and diesel costs eased last month but food prices continued to soar, reaching the highest since 1977.

Image source, Contributor

Shannon McIntyre, a florist who runs Feather and Fern in Hawes, North Yorkshire, opened her business in August 2020, facing lockdowns right from the get-go.

Having survived that first challenge, now her business is facing another one as the cost-of-living crisis continues to bite and the price of goods remains high.

Speaking to the BBC, Shannon said she has had to up the costs of the flowers she sells in order to remain competitive.

Using roses as an example, she said growers of this flower variety "have turned off the gas so they're not growing."

It has meant that there is not only a supply and demand problem, but there is also a supply shortage, causing the price to double, she said.

"[The price] does go up, it does peak at Valentine's Day, Mother’s Day, Christmas but it’s the highest we’ve ever seen it, ridiculous," she said.

Asked the price she’d need to sell them at, Shannon said: “We’re probably looking at about £6-plus a rose and we would have done them at £3, probably less.

"We’re trying to work out what else we can do? Instead of panicking and having a meltdown… find something else that fills that gap.”

While inflation and the rising cost of living are probably the most important things on people’s mind, it’s important to bear in mind there are other indicators of how the UK is faring right now.

So how are we doing? To be frank, not well. At least by one of the key measures of economic performance - although things aren’t as bad as experts first thought.

The UK’s Gross Domestic Product (GDP) had grown very slightly by 0.1% November last year, helped by demand for services in the tech sector and in spite of households being squeezed by rising prices.

In some ways this is good news, as many economists had assumed the economy would shrink and the country looked headed into a recession, which is defined as two three-month periods of shrinking economic output in a row. It is generally associated with rising unemployment, as companies typically make less money.

But even if the country is not technically in a recession, 0.1% growth is still very low and indicative of a struggling economy. It is far below what most governments aim for.

On top of this, if you look at the entire period between September and November, the economy did indeed shrink overall by 0.3%.

Economists have suggested that the latest data makes it less clear whether the UK was in a recession at the end of last year. Experts say they expect to enter one even if it wasn’t.

What is inflation, why does it matter, and is someone to blame if it goes up?

Understanding why and how prices are rising will help you get to grips with why your shopping is getting more and more expensive and why prices rarely seem to come down.

In the first episode of this BBC series, economist and journalist Tim Harford explains why the inflation figure you see on the TV might not reflect the price rises you’re experiencing, whilst economic historian Victoria Bateman tells us why having a boat load of silver coins isn’t always a good thing.

Rebecca Wearn
Reporting from Hawes, North Yorkshire

Jasmine, who is 19, has grown up in the Dales.

For her, travelling over an hour to reach the services she needs is just part of life: “It’s 30 miles to our nearest supermarket, 30 miles to our nearest college.”

But that’s just meant high fuel costs have hit harder.

“I don’t have any house bills but I do have car bills, which means the cost of petrol going up has a knock-on for me getting around. Everything is a bit of a stretch and you can’t rely on public transport,” Jasmine told BBC News.

In Richmondshire, North Yorkshire, where Jasmine works part-time in the Fountain Pub in Hawes, typical pay is below the national average. And although housing is generally cheaper than other places, the lack of a bus service, and living miles from a railway, mean locals rely on their cars.

The rising cost of living is tempering her excitement to go to university later this year: “It’s definitely going to be a push.”

Kevin Peachey
Cost of living correspondent

It is well worth repeating that inflation affects people in different ways. The ONS gives us a general rate of price increases - but some have a higher rate than others.

Why? Those on lower incomes, for example, spend a higher proportion of their income on food and domestic energy - the cost of which have risen sharply.

So they are likely to have a higher than typical personal inflation rate.

Young people may be in a similar position, and a survey by the TSB bank suggests many have been turning to debt to cover these bills.

Its own internal data suggests that the proportion of 18 to 24-year-old customers going overdrawn is 10% higher than a year ago.

People who struggle to make debt repayments can quite quickly find themselves with a problem.

The Green Dragon pub in Hardraw in the Yorkshire Dales has closed down to cope with big bills.

Landlord Mark has been behind this bar for over four decades and has been quoted £50,000 to £70,000 a year for bills that were once just a fraction of that.

Now he’s considering opening the doors again, but only two days a week: “I do have a duty, as a licensee and an innkeeper to try and keep the community together and keep something rolling as best I can,” he told BBC News. “It’s a shame the economics have got in the way.”

He’s been using more coal to mitigate costs like many of his neighbours. Almost every house in this part of the Dales is off the gas grid, instead heating their home by coal, log or oil. The same is true for almost 4.4 million households across Britain (UK Govt 2021 – not inc. NI).

Richmondshire homes are less efficient, on average, than the rest of England, with most being beautiful old stone cottages dating back hundreds of years - 16% of households here are classified as being in fuel poverty (BEIS 2020).

“I’m worried for the future of these places” says Mark. “They reckon one pub a day is closing at the moment. That’s a tragic loss for English social life.”

The former deputy governor of the Bank of England, Sir John Gieve, says he expects the government to stay on track to halve inflation by the end of the year.

Prime Minister Rishi Sunak has said slashing inflation by half by the end of 2023 is one of his top priorities.

Speaking to the BBC, Sir John says the Bank of England is forecasting an inflation rate of 5% by the end of the year, while the Office for Budget Responsibility (OBR) is forecasting 4%.

As a result, he says he thinks the government "is on track" to fulfil its target, but added that there is "still 12 months to go, so there's a lot of uncertainty".

The former deputy governor of the Bank of England, Sir John Gieve, says the slight lowering of the inflation rate to 10.5% is "encouraging", but "a lot of the pain and hard work" to bring inflation down is "still to come".

Speaking to the BBC, Gieve says it is "the first time the news on inflation hasn't been worse for over a year. So I suppose that's encouraging."

But he says inflation is still high, particularly "in relation to wage increases, especially in the public sector." He adds that the core rate of inflation - if energy and food costs are stripped out - is still rising and is "still miles above where it ought to be".

As a result, he says "there's a bit of a paradox" going on. While it seems good news that employment is holding up, GDP figures are holding up, and maybe the recession won't be as severe and as quick, the Bank of England has been "relying on a bit of a recession, a real squeeze, in order to bring inflation down, so I think they'll be looking at it in a slightly different way, which is: 'The economy is stronger than we expected, and therefore we've got to push harder.'"

Rebecca Wearn
Reporting from Hawes, North Yorkshire

Julie has been providing support to people at the sharp end in the Yorkshire Dales for years.

Her problem isn’t getting much-needed food and fuel to people – it’s persuading them to accept it.

“People are really proud here,” she explains. We met Julie at St Oswald’s Church in Askrigg, where a small pantry is open seven days for anyone to fill a bag with supplies without drawing attention to themselves.

“It’s nice that people can be under the radar,” Julie says. “It’s a close-knit community. Everyone is related in some way.”

Even though the area is stunningly beautiful, it masks fuel poverty above the average for England (Office for National Statistics - 2020).

Julie says the high fuel, food and petrol costs have been incredibly difficult in such an isolated area.

And she doesn’t want the generosity and kindness of the community to become the norm. “I’d like to say I’m positive, but I’m not,” she adds. “I would like to see people here be able to support themselves and have a nice life.”

Chancellor Jeremy Hunt has been compared to the comedy TV character Mr Bean over a social media video in which he uses coffee cups to explain inflation.

In the Treasury-produced video, Hunt orders a flat white before explaining what he is doing to tackle rising prices.

Sarah Olney, the Lib Dems' Treasury spokesperson, said the "last thing" families needed was a "Mr Bean-esque video" from the Conservative party.

"What's even more shocking is that Jeremy Hunt airbrushed one of the main causes of economic pain - Liz Truss' disastrous mini-budget that resulted in the biggest tax hike for a generation," she added.

A Labour source said: "The chancellor's 'not me guv' explainer misses out the fundamental fact that the British public have been so exposed to economic shocks and the energy crisis because of 13 years of Tory failure."

The video also makes no mention of the effect of Brexit on rising prices as our global trade correspondent Dharshini David has just explained.

Read our full story here.

Dharshini David
Economics Correspondent

Between the impact of the war in Ukraine and disruption to supply chains from lockdowns on global food prices, and variations in the weather, it’s not easy to separate out the impact of Brexit on our grocery bills.

But researchers at the London School of Economics (LSE), external have had a stab to isolate the impact that preparing for and handling the extra paperwork and border checks resulting from Brexit has had on the price of food we import from the EU - which accounts for about a quarter of our diet.

They reckon the extra admin and controls pushed the price of those foods up by 6%. That’s across two years to the end of 2021. It’s equal to about £2 on the average weekly household bill, or £100 per year.

We don’t know if that continued rising into 2022 - and it’s only part of the rise in food bills. But it's not helpful at a time when other costs are soaring.

One consolation though: the academics reckoned that most costly imported foods may be making it easier for British producers to compete and grow.

In response to consumer group Which?'s report comparing food price rises at different supermarkets, some of the major retailers have emphasised they are "working hard" to keep things affordable for consumers.

Waitrose was keen to point out the research demonstrated "our price inflation was in fact lower than the market average", adding that they contiune to "deliver industry-leading animal welfare standards, fresh produce grown with care and fair deals for farmers".

For its part, Asda said it was "working hard to keep prices in check for customers" to maintain its place as "the lowest-priced major supermarket - a position recognised by Which?" - adding the consumer group had named them as "cheapest supermarket for a big shop every month for the last three years".

Acknowledging household budgets are coming under "increasing pressure", Tesco said it is "absolutely committed to helping our customers by keeping a laser focus on the cost of the weekly shop", adding it had been recognised by industry magazine the Grocer as the "retailer doing the most to keep prices down right now".

Finally, an Aldi spokeswoman said: "We are the lowest-priced supermarket in Britain. Our customers will always pay less for their shop with Aldi and that is why Which? has named us as the cheapest supermarket in 2022."

As food and drink prices continue to rise, many of us will be feeling the pain at the supermarket checkout.

Consumer group Which? has also been tracking how much major retailers have put up their prices, comparing them to competitors.

The group's supermarket food and drink inflation tracker records the annual price rises of tens of thousands of food and drink products across three months at eight major supermarkets - Aldi, Asda, Lidl, Morrisons, Ocado, Sainsbury's, Tesco and Waitrose.

Which? found that despite being the cheapest supermarkets overall, Lidl's prices went up the most in December at 21.1% since this time last year, followed closely by Aldi at 20.8%.

According to the data, Asda had the third highest price rises at 15.4%, followed by:

• Waitrose - 14.5%
• Sainsbury's - 13.7%
• Tesco - 13.1%
• Morrisons - 12.9%
• Ocado - 10.5%

For comparison, the industry average for the the same period is 15%.

At the same time, across these supermarket's ranges, inflation was significantly higher on budget (20.3%) and own-brand items (18.5%), than it was for premium (12.6%) and branded (12.5%) alternatives.