UK inflation jumped sharply in the year to January, driven by rising food prices, air fares and an increase in private school fees.

The higher-than-expected jump to 3% from 2.5% in December, means prices rose at the fastest pace for 10 months.

Food staples such as meat, eggs, butter and cereals were all more expensive than a year ago and comes as many households prepare for higher energy and water bills later this year.

Following the latest figures, the government warned that the road back to low inflation would be “bumpy”, but the Conservatives and Liberal Democrats argued Labour’s tax rises and spending plans had caused the latest spike.

Rising food prices last month mean, on average, the cost of buying groceries is 3.3% more expensive than it was a year ago.

While many staples have edged up in price, some items such as olive oil and lamb have increased markedly, by 17% and 16% respectively.

The rise in inflation, which is a measure used to give a general picture of how living costs have changed over a year, comes ahead of predicted increases to energy bills in April.

Water and council tax bills are also slated to rise in two months’ time, which will push up the cost of living for households.

The government has raised the minimum wage for all age groups from April. Benefits and the state pension will also increase.

But some businesses have warned that higher pay, as well as a rise in National Insurance, will mean increased prices for customers as companies attempt to cover increased costs.

“Life is a struggle,” said Gaby Cowley. The young mum told the BBC that she could already “barely make both ends meet” but food prices are now “ridiculous” – something that keeps her up at night.

“Food shopping has almost doubled from about three years ago,” she said. “We spend, maybe, a minimum of £90 a month now and that doesn’t include £20-£30 topping up during the week with fruit, veg and milk.”

If there is more money going out than coming in, Ms Cowley said she will sell her baby’s old clothes “just to make a little bit of money to do things”.

She hopes the rise in minimum wage will see her pay go up, although she thinks the struggle is far from over.

As well as food, inflation was fuelled last month by plane tickets. Air fares tend to rise into December and fall into January, but the drop was less than in previous years, according to the Office for National Statistics (ONS).

It also said that private school fees grew by about 13% at the beginning of the year due to VAT being added from 1 January after the government removed the tax exemption.

The sharper rise in inflation – it had been expected to climb to 2.8% – has also led to speculation over how the Bank of England will react in terms of interest rates.

High inflation in recent years, peaking at 11.1% in October 2022, saw the bank raise interest rates, which pushed up the cost of loans, credit cards and mortgages.

As price rises have eased, borrowing costs have fallen and the Bank decided to cut rates earlier this month to 4.5%.

But with the rate remaining above the Bank’s 2% target, some economists suggest further cuts could be made at a slower pace.

Professor Jonathan Haskell, a former member of the Bank of England’s interest rate-setting committee, told the BBC that policymakers could “take no signal” from the inflation spike and carry on cutting rates gradually or view it as a “harbinger of more to come” and change course.

Grant Fitzner, chief economist at the ONS, said because the VAT charge on private schools came into effect last month, the impact on inflation was a “one-off”.

But Sarah Coles, head of personal finance at Hargreaves Lansdown, said the threat of higher wage bills for supermarkets and producers meant there was “every chance” food price rises in January would not be the last.

“This is on top of rises in everything from water bills and council tax – which is why it has become known as Awful April,” she said.

James Murray, exchequer secretary to the Treasury, admitted that getting inflation back down to the 2% target would be “bumpy”.

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

“The Bank of England has been clear that they expected inflation to be slightly higher in the first half of this year….but we’re confident in our plan for change to make sure that we’re kick-starting economic growth by making the reforms that are necessary to boost economic growth right across the country,” he added.

But shadow chancellor Mel Stride said Labour’s “tax hikes and inflation-busting pay rises” were to blame for the scale of January’s rise.

Liberal Democrat Leader Ed Davey added: “The chancellor’s misguided policies are putting us at risk of a new era of stagflation. The economy still isn’t growing, and now people are being hit in their pockets too.”

Ruth Gregory, deputy chief UK economist at Capital Economics, said January’s figure would be “uncomfortable” for the Bank of England, but said she doubted it would prevent further rate cuts.

“The risk is that the rise in inflation proves more persistent and rates are cut more slowly than we expect, or not as far,” she added.