UK CPI slowed to 3.0% YoY in January (from 3.4%), matching expectations and marking the lowest level since March 2025. On a monthly basis, inflation fell -0.5%, showing broad price easing.
Core inflation dipped slightly to 3.1%, while goods inflation cooled sharply to 1.6%. However, services inflation remains sticky at 4.4%, keeping pressure on the Bank of England.
Lower petrol, airfares, and food prices drove the decline, though hotel and takeaway costs increased.
Inflation is easing, but sticky services prices may keep the BoE cautious despite rising bets on a March rate cut.
What do yout think,
Does 3% CPI meaningfully change the UK rate path, or is it still too early to pivot?