UK inflation falls to 3%, giving hopes of early cut in interest rates

The Guardian - World NewsEN 2 min read 100% complete by Phillip InmanFebruary 18, 2026 at 08:01 AM

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UK inflation fell to 3% in January, the lowest since March 2025, raising hopes for an early interest rate cut by the Bank of England. The Office for National Statistics reported that lower petrol prices, air fares, and food costs drove the decrease. While GDP growth remains slow and unemployment has risen, economists anticipate inflation will soon reach the Bank of England's 2% target. Chancellor Rachel Reeves welcomed the news, highlighting government measures like energy bill reductions and frozen rail fares aimed at easing the cost of living. These figures are expected to influence the Bank of England's upcoming decisions regarding interest rates.

Key Entities & Roles

Key Player Opposition Context

Threadneedle Street 40% Grant Fitzner 50% Office for National Statistics ×270% Rachel Reeves ×270% Bank of England ×280% United Kingdom 90%

Keywords

inflation 100% interest rates 80% cost of living 70% economic growth 70% unemployment 50% food prices 50% petrol prices 50% gdp 40% private sector earnings 40%

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Positive

Score: 0.40

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The Guardian - World News

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90%

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United Kingdom

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inflation interest rates cost of living economic growth unemployment food prices petrol prices gdp private sector earnings

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