Inflation tumbles in January

The latest UK inflation figures have just been released by the Office for National Statistics.

Headline CPI (January 2026): ~3.0% (y/y), – UK inflation tumbled to 3% in January, giving a boost to hopes of an early cut in interest rates by the Bank of England.

This marks the lowest annual inflation rate since March 2025, but remains above the BoE’s 2% target.

Labour market data shows a rising unemployment rate and slower wage growth – factors increasingly shaping interest rate expectations.

Jonathan Samuels, CEO of Octane Capital, said, “Today’s inflation data shows a welcome step back in price pressures, with headline CPI easing to around 3.0% in January. This suggests that the temporary uptick seen at the end of 2025 has likely subsided and that disinflation continues to move in the right direction.

Of course, with inflation not yet at target and underlying pressures still evident, a measured approach from the Bank of England remains essential and, whilst Markets may be pricing in cuts, it would be wise to maintain flexibility until the path back to sustained 2% inflation is clear.”