From Morningstar:

The UK’s annual inflation rate remained steady at 4.0% in January, defying expectations of a slight acceleration. Consumer prices decreased 0.6% from December, more than the expected 0.3% decline. Producer prices fell 3.3% year-on-year and 0.8% monthly, both exceeding expert predictions.

Governor Andrew Bailey’s next press conference is at 3pm today. The next Bank of England decision is due on March 21, with expectations that annual inflation could return to target in Spring, and rise to 2.75% towards the end of the year.

Falling interest rates could decrease cash savings rates but also make consumer debt cheaper. People with variable-rate mortgages may benefit but savers may see lower returns, especially if they hold fixed-rate products.

Markets could react swiftly to news of a rate cut. Falling interest rates make bonds more attractive, benefiting pension funds and the government as well as the economy’s real businesses. Lower rates could stimulate spending and potentially relieve supply chain pressure.

Lower interest rates are expected to have a net positive impact on the economy, benefiting a variety of stakeholders including consumers, businesses, and the government’s economic initiatives.



Read more: UK Inflation Steady at 4%