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2026-02-18 15:24:11
[UK Core CPI Falls to Lowest Level Since September 2021, Services Inflation Remains Higher Than Expected] ⑴ Data released on Tuesday showed that the UK's core CPI rose 3.1% year-on-year in January, lower than the previous value of 3.2%, marking the lowest level since September 2021 (2.9%). Month-on-month, it fell 0.6%, largely in line with market expectations. ⑵ Services inflation remains sticky. The services CPI rose 4.4% year-on-year in January, higher than the market expectation of 4.3%, but lower than the previous value of 4.5%. Month-on-month, it fell 0.3%. ⑶ Following the data release, UK gilt futures rose slightly, briefly touching a new high for Tuesday, marking six consecutive trading days of gains, before retreating from the highs. The market currently expects a 75% probability of a 25 basis point rate cut by the Bank of England in March. ⑷ The continued cooling of core inflation provides more room for the Bank of England to cut rates further. However, services inflation remains high, which may make the central bank cautious when easing policy. The market will focus on upcoming wage and employment data to further assess the direction of inflation.
