Week in Review - 23 January 2025

Martin Beck, Chief Economist | Economic Consulting and Analysis

This week’s data painted a familiar but consequential picture of the UK economy. The labour market is weakening, with falling payrolls and slower wage growth. December’s rise in CPI inflation looks like a temporary blip, consumer spending picked up modestly over Christmas, while the public finances saw an unexpected improvement. Taken together, the case for lower interest rates has strengthened, even if the Bank of England (BoE) is probably not quite ready to move yet.