UK Annual Inflation Cools to 3.0% in January

Britain's annual Consumer Prices Index (CPI) fell sharply to 3.0% in January 2026, down from 3.4% in December 2025. The Consumer Prices Index including owner occupiers' housing costs (CPIH) rose by 3.2% in the 12 months to January, a decrease from the 3.6% recorded the previous month. On a monthly basis, CPI declined by 0.5%, a far cry from the 0.1% dip seen in January 2025. This downward shift was mostly led by falling costs in transport and food and non-alcoholic beverages. Motor fuel prices played a major role, with petrol dropping 3.1 pence per litre. Food and non-alcoholic beverage inflation slowed to 3.6%, down from 4.5% in the 12 months to December 2025. Housing and household services was up 4.2% in January 2026, prices in education division rose by 5.1%, while restaurants and hotels prices increased to 4.1%. Core CPI which excludes energy, food, alcohol and tobacco rose by 3.1%.