UK Inflation Cools to 3% in January, Bolstering Case for Bank of England Rate Cut

• UK inflation fell to 3% in January, its lowest in nearly a year, down from 3.4% in December.
• The moderation was driven by slower increases in transport, food, and non-alcoholic drink prices.
• Core inflation, excluding volatile components, slowed to 3.1%, its weakest pace since September 2021.
• Services inflation remains sticky at 4.4%, slightly above expectations, indicating lingering domestic pressures.
• Markets price in an almost 80% probability of a quarter-point rate cut by the Bank of England in March.