Adam Goldsmith
Live reporter

We're off to grab an (increasingly pricey) coffee, but before we go, here's some wider reading to walk you through what today's inflation rise might mean for you:

• Our explainer takes you through all the fundamentals on today's inflation increase, including how household staples like meat and eggs all cost more than a year ago
• Some good news here is that UK wages continue to outpace inflation. This might help some keep up with rising prices, but there are warnings employers may cut workforces ahead of higher employment costs arriving in April
• A little earlier on, BBC Scotland's Douglas Fraser took us through what today's figures might mean for housing costs. That's after the ONS reported that house prices increased by 4.6% in the year up to December 2024.
• Coming up: Will the Bank of England choose to cut interest rates, as the government hopes? Business correspondent Theo Leggett says the key question will be whether the rise in inflation proves to be temporary

Thanks for reading.

Image source, Getty Images

This page was edited by Dulcie Lee and Emily Atkinson. The writers were Ruth Comerford, Amy Walker and me.

The rate of inflation in UK the rose from 2.5% to 3% in January.

It's the highest level in 10 months, and up by more than the 2.8% predicted by many economic experts.

We're ending our coverage shortly. Before we go, let's whip through key lines:

• The rise was driven largely by increased private school fees, meat and bread costs, and airfares, which didn't fall by as much as much as usual
• The Treasury says the road to achieving the Bank of England’s 2% inflation target will be “bumpy” - but it's "confident in our plan for change to make sure that we're kick-starting economic growth"
• Our business correspondent Theo Leggett says the Bank of England may have to change its priorities and keep interest rates higher for longer
• Chancellor Rachel Reeves says her “number one mission” is “getting more pounds in pockets” - but the Lib Dems say her policies are “misguided”
• Shadow chancellor Mel Stride blames “record tax hikes and inflation-busting pay rises” for today’s rise - he says Reeves is “out of her depth”

What might today's figures mean for housing costs?published at 12:20 Greenwich Mean Time 19 February

12:20 GMT 19 February

Douglas Fraser
Business and economy editor, BBC Scotland

Image source, PA Media

While consumer prices continue to rise, and faster than the Bank of England target 2%, household bills are being more stretched by increases in housing costs.

Private landlords are charging ever higher rents, partly because their finance costs have gone up, and partly because they can. And that affects nearly a fifth of UK households.

Rising rent reflects a mismatch of rental housing supply and demand for it. For those in the most pressured areas, such as London and other big cities, it means tenants have to pay a high share of income on monthly rent.

But in England and Wales, seven in 10 council areas are seen by statisticians as having "affordable" rents, averaging less than 30% of income. The Office for National Statistics (ONS) estimates the affordability of rent, as a share of household income, was close in 2023 to the level eight years before.

House prices are linked to the rental market, but only loosely. They vary with buyer demand and seller supply, including newly-built homes.

Short-term demand changes are often driven by the cost of borrowing, and the forecast path for interest rates, which contribute to pricing of fixed-price mortgages.

One interesting change in today’s figures is a shift in the typical home being bought and sold. The ONS figures reflect a shift since it last estimated this for 2015, away from bigger, more expensive properties and from the more expensive parts of the country. So the average price, based on the market in early 2023, has been reduced by 7.9%. That does not change the price inflation rate, however.

Does the UK have the slowest growing economy in the G7?published at 12:14 Greenwich Mean Time 19 February

12:14 GMT 19 February

By Gerry Georgieva

Shadow housing secretary Kevin Hollinrake compared the UK’s economic performance under Labour and the Conservatives by telling GB News: "We were the fastest growing economy in the G7 and we're now the slowest growing economy".

During last year’s election campaign, the Tories often said that the UK had the fastest economic growth amongst the major advanced economies of the Group of Seven (G7).

At the time, this was true when looking at figures, external for the first three months of 2024.

After the election, however, when quarterly figures for April to June were released, it became clear that the Conservatives left office when we were in the middle of the Group in terms of growth, slower than the US, Japan and Canada.

In the last quarter of 2024, the UK was also in the middle, after those same three countries, so it’s also not true that we now have the slowest growth.

Olivia Hutchinson
Business reporter, Radio 5Live’s Wake Up To Money

Average wages are continuing to outpace inflation with pay packets rising for both the public and private sector workers, official figures show.

Pay, after taking into account the pace of price rises, rose 3.4% between October and December compared with the same period a year ago, according to the Office for National Statistics (ONS).

But are people really feeling like they've got more money in their pocket?

I've been speaking to workers in Salford - and the theme, put simply, seems to be "no".

"It's difficult because everything's going up," one man tells me. "But I think wages aren't following the national rate of inflation to be honest.

"And I think you're seeing everything from your bills going up, you've got to go out and socialise with your friends, go out for a meal, but no one that I know in any industry is actually getting an active pay rise to follow that."

A married couple who both work in the public sector tell me they "totally disagree" that wages are continuing to climb at the rate they are.

"You feel the strain on public services and resourcing and that kind of thing, but also you've got bills to pay and the mortgage and all those kind of things as well."

• You can listen to more on BBC Sounds

Nathan Standley
Education reporter

Image source, Getty Images

We've been hearing how a rise in private school fees has contributed to today's inflation figures - but why is that?

New rules came into effect on 1 January this year, removing the long-standing exemption private schools had on charging value added tax (VAT) on school fees.

It now applies to those fees at the standard rate of 20% - but individual schools can decide how much extra they charge parents to cover those new costs.

There are about 2,500 private schools in the UK, educating roughly 7% of all pupils. Average fees are about £15,000.

The Office for National Statistics says fees have risen by 13% this month.

And some schools say they are already seeing a drop-off in new students.

The government says it wants to spend the money raised on recruiting 6,500 new teachers, to target staff shortages in state schools.

Image source, Getty Images

Let's return now to today's top story - that the rate of inflation in January rose to its highest level in 10 months, from 2.5% to 3%.

The jump was driven in part by price rises across a range of everyday items, including BBC newsroom favourites coffee and chocolate.

As a reminder, the percentage changes below are year-on-year comparisons. In this instance, it's the change from December 2023 to December 2024 and January 2024 to January 2025.

Here are some key examples:

• Coffee was up 11.6% in January compared to just a 0.2% rise in December
• Chocolate jumped 14.1% in January - it rose by 11.7% in December
• Bus and coach travel prices accelerated by 8.7% in January - there had only been a 0.7% increase in December

But there were also some cases where the rate of inflation eased:

• Olive oil was up 16.6% in January, after prices increased by 22.3% in December
• Pasta and couscous prices were down by 5.9% - that's compared to a smaller fall of 2.4% in December
• And restaurants and cafes saw a smaller inflation increase in January than December, of 3.5% compared to 3.8%

Image source, PA

Some more economic news for you now.

The average UK house price increased by 4.6% to £268,000 in the year up to December 2024, according to data from the Office for National Statistics (ONS).

In December, the average house price in England was £291,000, compared with £208,000 in Wales and £189,000 in Scotland.

Meanwhile, provisional data shows average UK rents rose by 8.7% in the year to January 2025.

Last month, the average rent for England was £1,375, compared with £780 in Wales and £995 in Scotland.

More now from Treasury minister James Murray, who we heard from a little earlier on.

"We are in a different world than we were a few years ago under the previous government, where inflation was routinely double digits," he says.

Inflation peaked at over 11% in 2022 when oil and gas were in greater demand after the Covid pandemic, and energy costs surged following Russia's full-scale invasion of Ukraine.

Despite today's 3% figure being significantly lower, Murray admits that "families across the country are still finding it hard to make ends meet".

This is why "putting more money in people's pockets is at the heart of our plan for change to kick-start economic growth", he says.

Image source, EPA

What does inflation mean?

Put simply, inflation refers to the rise in the cost of goods and services over a period of time. For instance if a bottle of milk costs £1 but is £1.05 a year later, then annual milk inflation is 5%.

What happens when inflation rises?

When inflation is high, it means the cost of living is high and food, travel, household bills and clothes are more expensive.

Is inflation good or bad?

It's more about cost.

If the rate of inflation is low, things are more affordable. If it's high, it's going to cost more to buy the things you want and need.

What happens to interest rates when inflation rises?

To rein in the affects of inflation, the Bank of England may raise interest rates.

Our correspondent, Theo Leggett, says the Bank may have to change its priorities and keep interest rates higher for longer, which might mean higher mortgage repayments for homeowners.

• For more on how inflation is calculated, have a read of our explainer

How worrying are today's figures?published at 09:47 Greenwich Mean Time 19 February

09:47 GMT 19 February

Theo Leggett
BBC International Business correspondent

Some of the upward pressures were obviously well-anticipated, such as the big spike in private school fees as a result of VAT being imposed on them.

The smaller than expected decrease in January airfares might annoy winter travellers, but is unlikely to cause major issues.

But the increase in food price inflation from 1.9% to 3.1% will be a definite concern. Essentials such as meat, bread and cereals are becoming ever more expensive – at a time when families are struggling to cope with the price rises already seen over the past couple of years. That is politically very sensitive.

So-called "core inflation", which strips out more volatile items has also been rising. Component prices have increased. That could be because of trade tensions created by the new US government, prompting businesses to stockpile the products they need. Energy prices are rising due to a cold winter, and that is expected to be reflected in the next set of figures.

The questions that remain are clear: how much of this is temporary and likely to settle back later in the year? And how much of a problem does this represent?

Inflation in the UK has jumped from 2.5% to 3% - it's highest level in 10 months.

This means that on average, something which cost £1 a year ago now costs £1.03.

It comes as a shock to economics experts, who had broadly predicted inflation would rise to 2.8%.

It happened because prices didn't fall by as much as they normally do in January - especially plane tickets. The cost of food and non-alcoholic drinks also rose, according to the ONS.

The chancellor says her primary “mission” is “getting more pounds in pockets”. Rachel Reeves says she’ll “kickstart growth” by getting rid of unnecessary regulation and investing in rebuilding roads, rail and energy.

Opposition parties aren't so upbeat. Lib Dem leader Ed Davey is warning of "a new era of stagflation". Shadow chancellor Mel Stride says today's figures "mean further pain for family finances".

What's next? Our correspondent, Theo Leggett, says the Bank of England may have to change its priorities and keep interest rates higher for longer - that might mean higher mortgage repayments for homeowners.

Image source, PA Media

Liberal Democrat leader Ed Davey is warning of "a new era of stagflation" after inflation rose to 3.0%.

"Stagflation" can be broadly summarised as occurring when there is low, no or negative growth in the economy, coupled with high and rising inflation.

The phrase combines the terms stagnation and inflation. It's caused by the price of essential goods and energy rising, while overall economic activity is static or falling.

Broadly, this means prices go up, but purchasing power drops. For instance, in a period of stagflation, if you consistently buy £30 of groceries every week, you'll find that you get less for your money over time.

It can also lead to high unemployment, as companies create fewer jobs and limit pay rises.

The road to the 2.0% inflation target will be “bumpy”, says Treasury minister James Murray.

As we just reported, the Lib Dem leader has warned that the rise in inflation to 3.0% puts the UK in line for a "new era of stagflation".

Asked whether today’s inflation figure suggested stagflation, Murray does not directly answer the question.

He says the Bank of England has been "clear that they expected inflation to be slightly higher in the first half of this year, while still being on target to go down towards its 2% target rate".

He says the road will be "bumpy", but the government is "confident in our plan for change to make sure that we're kick-starting economic growth".

• Inflation this morning jumped to 3.0% in the twelve months to January, above what economists had forecast. The Bank of England expects it to reach 3.7% later this year before falling back to its 2% target

Image source, PA Media

Like the Tories' Mel Stride, the Liberal Democrats have stern words for the chancellor following the inflation hike.

Party leader Sir Ed Davey warns that today's figures put the UK at risk of "a new era of stagflation".

Wait, what's stagflation? A situation where the economy is struggling to grow at the same time as there is high inflation

He says Rachel Reeves's "misguided policies" means the "economy still isn't growing".

"The government urgently needs to change course," he adds. "Starting by cancelling their disastrous jobs tax and securing a much better trade deal with Europe.”

Earlier, Chancellor Rachel Reeves said the government was hoping to stimulate growth by "investing to rebuild our roads, rail and energy infrastructure and ripping up unnecessary regulation".

Image source, Getty Images

Let's turn now to some of the key political reaction to the surprise jump in inflation from 2.5% to 3.0% - the highest level in 10 months.

Rachel Reeves is "out of her depth, and we're all paying the price", says shadow chancellor Mel Stride.

Stride says today's figures "mean further pain for family finances", and puts this down to "record tax hikes and inflation-busting pay rises".

Reeves earlier responded to today's numbers by saying her "number one mission" is to get "more pounds in pockets".

But Stride says: "Labour were warned that their tax spending and borrowing spree would drive up inflation. It means higher prices in the shops and interest rates staying higher for longer, causing mortgage misery for millions."

Lets bring you a bit more from the experts.

Grant Fitzner, chief economist at the Office for National Statistics (ONS), tells BBC Radio 4's Today programme that one of the key reasons behind the rise in inflation to 3% was a smaller than average fall in January prices.

"Just a 0.1% fall compared with a 0.6% fall last year," he explains.

This was compounded by a smaller than usual price rise in December, particularly across airfares, he says.

Economics professor Jonathan Haskel adds that the Bank of England expected the consumer price index (CPI) to come in at 2.8%.

He warns that the service sector, which is the biggest source of inflationary pressure on the economy, will experience another hike with the planned rise in energy prices this year.

Today's figures could be a "harbinger of more to come," he says, which could mean the Bank is unwilling to implement further cuts to interest rates.

Some context: The Bank moves interest rates up and down to try to keep inflation at 2%, and has cut three times since August 2024.

• UK inflation rate: How quickly are prices rising?

Michael Race
Business reporter

Image source, Getty Images

Looking closer at the reasons behind the surprise rise in inflation, food prices across a range of goods are more expensive than they were a year ago.

Staple goods such as milk, cheese, eggs and bread have all risen in price, the ONS said, as well as coffee, tea, cereals and meat.

Sugar, jam, chocolate and soft drinks were also up marginally.

When it comes to the overall inflation rate, the bigger-than-expected rise will come as a shock but Grant Fitzner, of the Office for National Statistics, thinks the VAT hike on private schools is a "one-off" factor driving up the rate of inflation.

Some economists also think it is unlikely to impact the Bank of England’s course to lowering interest rates further this year.

Image source, EPA

Rachel Reeves responds to the jump in inflation saying her "number one mission" is getting "more pounds in pockets".

"Since the election we've seen year-on-year wages after inflation growing at their fastest rate - worth an extra £1,000 a year on average - but I know that millions of families are still struggling to make ends meet," the chancellor says.

She says the government is "going further and faster to deliver economic growth".

It will do this by "taking on the blockers to get Britain building again, investing to rebuild our roads, rail and energy infrastructure and ripping up unnecessary regulation, we will kickstart growth, secure well-paid jobs and get more pounds in pockets," she says.

It comes after the Bank of England governor Andrew Bailey said the impact of the government's choices in the Budget to raise minimum wages and employer National Insurance contributions would impact inflation.

When inflation rises above the Bank of England's 2% target it can decide to raise interest rates.

After many months of keeping interest rates at a 16-year high of 5.25%, the Bank of England cut them to 5% in August 2024, and again to 4.75% in November.

It held rates in December, before the cut to 4.5% in February.

Bank of England governor Andrew Bailey said the Bank expected to make further rate cuts, but will take "a gradual and careful approach".

Bailey said the impact of the Budget, particularly the looming higher costs of employing people, was feeding through into lower confidence for businesses and households.

It is also not clear how US President Donald Trump's plans to introduce tariffs on key imports could affect the UK.