Hopes of an interest rate cut boosted

HOPES of an interest rate cut have been boosted after it emerged inflation is expected to fall to its lowest level in nearly a year, with figures to be revealed on Wednesday.

- By HOLLY WILLIAMS

The majority of economists are forecasting Office for National Statistics (ONS) data to show Consumer Prices Index (CPI) inflation fell back sharply to 3% in January from 3.4% in December, says Pantheon Macroeconomics.This would be the lowest level since March 2025.

The news will come on the back of lower airfares, food and energy price inflation in January, and the figures are likely to reinforce expectations of another interest rate cut, possibly as soon as March.

Disappointing growth figures for the final quarter of last year have added to forecasts for a rate cut in March, to 3.5% from 3.75% currently.