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A customer looks at goods on a shelf in a supermarket on January 15, 2025 in London, England. <\/p>\n
Dan Kitwood | Getty Images News | Getty Images<\/p>\n<\/div>\n<\/div>\n<\/div>\n
The U.K. inflation rate cooled to 3% in January, according to\u00a0the latest figures\u00a0from the Office for National Statistics (ONS).<\/p>\n
Economists polled by Reuters had expected the consumer price index to fall to 3%, down from 3.4% in the twelve months to December.<\/p>\n
Core inflation, excluding energy, food, alcohol, and tobacco, stood at 3.1% in January, down from 3.2% in December<\/a>.<\/p>\n The data will be closely analysed by the Bank of England as it looks for further signs to confirm its view that the U.K.’s inflation rate will fall close to the central bank’s 2% target by April. <\/p>\n U.K. jobs and wage data<\/a> out Tuesday gave the BOE further signs of weakness in the labor market and an easing of inflationary pressures with the unemployment rate rising to 5.2% in December, the highest level in five years. Annual wage growth, a key inflation metric closely watched by the central bank, weakened in the last three months of 2025.<\/p>\n<\/div>\n Growth data released last week showed the wider slowdown continued, with the economy growing a meager 0.1%<\/a> in the fourth quarter. We’ll get another shot of economic activity in the country this coming Friday when purchasing managers’ index (PMI) data is released.<\/p>\n Economists expect that the latest batch of data could prompt the BOE to cut its benchmark interest rate, currently at 3.75%, at its next meeting in March. <\/p>\n “The gloomy picture painted by recent U.K. growth figures and today’s evidence\u00a0of\u00a0a lacklustre jobs market has increased the likelihood that the\u00a0Bank\u00a0of\u00a0England\u00a0will cut rates at the next meeting in March. It has also increased expectation that rates could reach as low as 3% by the end\u00a0of\u00a0the year,” Danni Hewson, head\u00a0of\u00a0financial analysis at AJ Bell, said in emailed comments Tuesday.<\/p>\n