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UK inflation falls to 3%, giving hopes of early cut in interest rates
UK inflation dropped to 3% in January due to falling petrol and food prices, raising chances of a Bank of England interest rate cut next month, economists say.
- ONS data for the Office for National Statistics showed consumer price index fell to 3% in January, matching economists' expectations and the lowest since March 2025.
- Falling petrol and food prices meant lower inflation this month, with airfares dropping after December while hotel stays and takeaways added upward pressure.
- Detailed ONS figures indicated core inflation stood at 3.1% in January alongside a 5.2% unemployment rate and weaker annual wage growth as fourth-quarter GDP growth slowed to 0.1%.
- Markets reacted by pricing a Bank of England rate cut toward 3.5% from 3.75%, while sterling traded at $1.3562 as investors assessed policy implications.
- Analysts cautioned that weak growth and jobs data mean rates could fall to 3% by year-end, while markets and the Bank of England's March meeting will watch purchasing managers' index due this coming Friday.
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The annual inflation rate in the UK was 3.0 percent in January, down 0.4 percentage points from December and the lowest since March last year. On a monthly basis, prices fell by 0.5 percent, after falling by 0.1 percent in December, the Office for National Statistics said today.
Wiltshire Times+3 Reposted by 3 other sources
What UK inflation drop to 3 per cent means for mortgages, savings and interest rates
UK inflation has dropped to 3%. Here’s what it means for mortgage rates, savings accounts and the chances of a Bank of England rate cut.
·Trowbridge, United Kingdom
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Coverage Details
Total News Sources34
Leaning Left6Leaning Right2Center14Last UpdatedBias Distribution64% Center
Bias Distribution
- 64% of the sources are Center
64% Center
L 27%
C 64%
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