Inflation in the UK dropped to 3% in the year to January, according to the Office for National Statistics (ONS). This marks a significant decline from the previous reading of 3.4% and is the lowest level since March 2025, when it stood at 2.6%.
Despite the fall, the Consumer Prices Index (CPI) remains above the Bank of England’s 2% target. However, experts suggest that the likelihood of an interest rate cut in March has increased, as inflation continues to trend downward.
Most economists had anticipated the drop, and forecasts indicate that inflation will continue to approach the Bank of England’s target over the course of the year. This could provide relief for mortgage holders and savers, who have been affected by high interest rates.
The ONS data comes amid broader economic discussions, including concerns about age discrimination in the workplace and strategies for saving money on household expenses. A recent study found that 37% of workers aged 51 to 70 felt they were treated poorly due to their age.
