UK inflation leaps to higher-than-expected 3% in January

The U.K.’s inflation rate surged to 3% in January, exceeding analyst expectations, driven by transport and food costs, with core inflation rising to 3.7%, the highest since April 2024. The Bank of England recently cut interest rates to 4.5% due to sluggish growth and falling inflation, forecasting a rise to 3.7% in the third quarter of 2025 before falling back to the 2% target by 2027, while also revising the country’s economic growth outlook from 1.5% to 0.75% for the year.

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