UK inflation cools to 3% in January, boosting BoE rate cut hopes

UK inflation eased to an annual rate of 3% in January, official data showed on Wednesday, offering fresh evidence that price pressures are gradually subsiding after a prolonged period of elevated inflation. Figures from the Office for National Statistics showed the consumer price index fell from 3.4% in December, matching expectations in a poll of economists by Reuters. It marked the lowest annual inflation rate since March 2025. Core inflation, which strips out energy, food, alcohol and tobacco, also edged lower to 3.1% from 3.2% a month earlier, suggesting underlying price pressures are easing, albeit slowly. Fuel, food and airfares drive slowdown The decline was driven in part by falling petrol prices, according to ONS chief economist Grant Fitzner. Writing…