UK Inflation Falls to 3 Percent, Economists Forecast Interest Rate Cut in Spring

Chancellor of the Exchequer Rachel Reeves said the Bank of England is expecting inflation to return to the 2 percent target within the next few months.

British Chancellor of the Exchequer Rachel Reeves leaves 11 Downing Street for the House of Commons in London on Feb. 4, 2026. Alastair Grant/AP Photo

The Office for National Statistics (ONS) on Feb. 18 said that UK inflation decreased to 3 percent in the 12 months to January, down from 3.4 percent in the 12 months to December 2025 and the lowest since March 2025.

ONS Chief Economist Grant Fitzner said in a post on X that the fall in inflation from March of last year was “driven partly by a decrease in petrol prices.”