Inflation falls back to 3%, opening the rate cut window further

Martin Beck, Chief Economist | Economic Consulting and Analysis

Inflation cooled sharply in January, with CPI falling to 3% and core inflation hitting the lowest in over four years. While services inflation remains sticky, easing pay growth and weaker economic momentum strengthen the case for further interest rate cuts. On current trends, inflation could fall below target by spring, increasing the likelihood of monetary easing in the months ahead.