“This sizable slowdown suggests that the struggle against soaring prices took a decisive turn for the better in January as lower airfares, petrol and food costs helped haul inflation nearer to more normal levels.
“Slowing services and core inflation will provide some reassurance for rate-setters that underlying price pressures are becoming less stubborn, and the squeeze on demand in the economy from higher unemployment and weaker wage growth should keep it on a downward trajectory.
“January’s decline kicks off a dramatic descent for inflation with falling food prices and lower energy bills – helped by the Chancellor’s cut to green levies and April’s expected energy price cap reduction – pulling it back to 2% in the spring.
“These figures make a spring interest rate cut look almost assured, though a lingering question among policymakers will be whether to pull the trigger in March or April as some may want slightly more evidence of easing inflation before reducing rates.”
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About ICAEW
Chartered accountants are talented, ethical and committed professionals. ICAEW represents more than 210,000 members and students around the world. 98 of the top 100 global brands employ ICAEW Chartered Accountants.* 87% of FTSE 100 companies, and 81% of FTSE 250 companies in the UK, have an ICAEW member on their board.
Founded in 1880, ICAEW has a long history of serving the public interest and we continue to work with governments, regulators and business leaders globally. And, as a world-leading improvement regulator, we supervise and monitor around 11,000 firms, holding them, and all ICAEW members and students, to the highest standards of professional competency and conduct.
We promote inclusivity, diversity and fairness and we give talented professionals the skills and values they need to build resilient businesses, economies and societies, while ensuring our planet’s resources are managed sustainably.
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ICAEW is a founding member of Chartered Accountants Worldwide (CAW), a global family that connects over 1.8m chartered accountants and students in more than 190 countries. Together, we support, develop and promote the role of chartered accountants as trusted business leaders, difference makers and advisers.
We believe that chartered accountancy can be a force for positive change. By sharing our insight, expertise and understanding we can help to create sustainable economies and a better future for all.
* includes parent companies. Source: ICAEW member data March 2025, Interbrand, Best Global Brands 2024.
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