UK inflation hits 3.4% as BoE weighs February rate cut
U.K. inflation edged up to 3.4% in December, slightly above forecasts, complicating expectations for a Bank of England rate cut in February. The Office for National Statistics says the uptick is driven in part by higher tobacco prices after excise duty in
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Show Notes
U.K. inflation ticks up to 3.4% in December, coming in slightly above forecasts and adding uncertainty to whether the Bank of England moves ahead with a February interest-rate cut. The Office for National Statistics says the increase is partly driven by higher tobacco prices after excise duty changes, with airfares and some food items also lifting the headline number. At the same time, core inflation holds at 3.2%, a sign that underlying price pressure is not rising sharply. Chancellor Rachel Reeves says the expectation remains for inflation to cool into spring and summer toward the BoE’s 2% target, as investors weigh inflation data against a cooling labor market and moderating wage growth.
Topics Covered
- 📊 What the 3.4% inflation print says about price pressures
- 🏦 How the Bank of England may approach a February rate decision
- 💷 Market reaction and what it signals for sterling and cuts in 2026
- 🛒 The drivers: tobacco taxes, airfares, and bread-and-cereal costs
- 💼 Jobs and wages as the key swing factor for the next move
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- (00:00) - Introduction
- (00:09) - UK inflation rises to 3.4% and the February BoE decision
- (01:52) - What prices are rising most and what comes next for households
- (03:09) - Conclusion