What might upcoming inflation figures imply for rates of interest within the UK?

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Your help makes all of the distinction. Learn extra Inflation is predicted to have fallen again to its lowest stage for practically a 12 months in Wednesday’s official figures for January, in a lift to rate of interest minimize hopes.

Most economists are forecasting Workplace for Nationwide Statistics (ONS) information to point out Client Costs Index (CPI) inflation fell again sharply to three% in January from 3.4% in December, in line with Pantheon Macroeconomics.

This might be the bottom stage since March 2025.

It's set to return on the again of decrease airfares, meals and power worth inflation in January.

The figures are prone to reinforce expectations of one other rate of interest minimize, probably as quickly as subsequent month.

Disappointing progress figures for the ultimate quarter of final 12 months have added to forecasts for a fee minimize in March, to three.5% from 3.75% at present.

The ONS mentioned gross home product (GDP) eked a meagre progress of 0.1% within the fourth quarter of 2025, leaving the out-turn for the 12 months as an entire at a worse-than-expected 1.3% growth.

Official figures on Tuesday exhibiting wage progress fell again as soon as once more to is lowest stage for nearly 4 years, to 4.2% within the three months to December, have additionally boosted the argument for a discount.

However Financial institution of England chief economist Huw Tablet mentioned at a Santander occasion on Friday that he thought charges have been already “just a little bit too low”, suggesting he wouldn't be amongst these voting for a discount subsequent month.

Mr Tablet voted as a part of the 5-4 majority on the Financial institution’s Financial Coverage Committee to maintain rates of interest on maintain at 3.75% earlier this month.

The Financial institution is forecasting that inflation will fall to its 2% goal by the center of the 12 months, as measures introduced within the Chancellor’s autumn finances will assist to sluggish inflation, significantly a package deal of help to convey down family power payments from April.

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For the most recent information, Pantheon is anticipating a steep drop “as power, airfares, training and meals worth inflation all sluggish”.

Pantheon consultants mentioned airfares are set to have dropped by practically 1 / 4 final month, having soared in December as elevated demand for journey over the festive interval fuelled worth hikes.

Although it believes inflation can be 3% – a contact greater than the Financial institution of England’s 2.9% prediction.

Investec Economics economist Ellie Henderson mentioned meals worth progress can also be prone to have dropped to 4.2%, under November’s stage, however warned there was a threat that meals inflation was nonetheless a “key concern”.

She added that inflation may additionally be pushed decrease by VAT on personal faculty charges falling out of the annual comparability, in addition to “some heavier discounting than regular by retailers”.

She mentioned: “A further small supply of downward stress on the annual fee appears to have come from utility costs.

“There was a near-5% rise in electrical energy costs on the month as per the power worth cap, however this was countered by a fall in fuel costs.

“In whole, the power worth cap elevated by simply 0.2% in January, smaller than the 1.2% enhance in January 2025.”

The inflation figures are available a busy week for official UK financial statistics, with information for presidency borrowing and retail figures additionally due on Friday.