UK inflation has fallen to 3 per cent, prompting hopes that an interest rate cut will follow.
The fall in the Consumer Price Index (CPI) data, published by the Office of National Statistics, follows a surprise rise in December to 3.4 per cent.
It shows a return to the gradual downward trend seen at the end of last year, with analysts estimating it remains on course to hit the government’s 2 per cent target by April.
After this week’s rising unemployment and slowing wage growth data, and a continually weak economy, it is hoped the fal could spur the Bank of England (BoE) to cut interest rates next month when the Monetary Policy Committee convenes to vote on 19 March.
Inflation hit a high of more than 11 per cent in October 2022, and while it has returned to more manageable levels in the past year, the pace has been slower than businesses and households would have liked, resulting in interest rates staying higher for longer.
Falling household bills and the reduction of the energy price cap in April are expected to contribute to bringing CPI inflation back to 2 per cent by spring. Food inflation is also expected to moderate, having been a big contributor to high inflation last year.
Why inflation has fallen to 3 per cent
Transport, food, non-alcoholic beverages and education led the downward contributions.
Dan Haygarth18 February 2026 07:42
Stride: ‘Families are still feeling the pinch because of Labour’s economic mismanagement’
Sir Mel Stride MP, shadow chancellor of the Exchequer, said: “Inflation remains above target thanks to Labour’s choices. Families are still feeling the pinch because of Labour’s economic mismanagement.
“This comes after the Office for National Statistics confirmed unemployment has risen to a five-year high, with youth unemployment now above the European average, and GDP per capita falling. Wes Streeting was right that Labour have no growth strategy.
“Britain is not being governed – the economy is weaker and working people are paying the price. Only the Conservatives have a plan for a stronger economy, and a leader with the backbone to deliver that plan and get Britain working again.”
Dan Haygarth18 February 2026 07:27
Cutting cost of living is my number one priority, chancellor says
Chancellor Rachel Reeves said: ”Cutting the cost of living is my number one priority.
“Thanks to the choices we made at the budget we are bringing inflation down, with £150 off energy bills, a freeze in rail fares for the first time in 30 years and prescription fees frozen again.
“Our economic plan is the right one, to cut the cost of living, cut the national debt and create the conditions for growth and investment in every part of the country.”
Tom Barnes18 February 2026 07:15
UK inflation falls sharply to 3%
UK inflation has fallen to 3 per cent, prompting hopes that an interest rate cut will follow.
The fall in the Consumer Price Index (CPI) data, published by the Office of National Statistics, follows a surprise rise in December to 3.4 per cent.
It shows a return to the gradual downward trend seen at the end of last year, with analysts estimating it remains on course to hit the government’s 2 per cent target by April.
Tom Barnes18 February 2026 07:12
