Bank of England faces bumpier road after inflation accelerates
Guardian2 days ago
UK: Inflation Rises to 3.0%
Above: A shopper in a Waitrose store in Canary Wharf, East London on Feb. 19, 2025. Image copyright: Yui Mok/PA Images via Getty Images
The Facts
The UK Consumer Price Index (CPI) rose to 3.0% in January 2025, up from 2.5% a month prior, with transport, food prices, and private school VAT flagged as the main drivers of the uptick. This means CPI inflation is now at its highest since March 2024.
Inflation rose from 0.4% in February 2021 to a peak of 11.1% in October 2022, before falling to 1.7% in September 2024. The Bank of England (BoE), which reduced interest rates by 0.25 points to 4.5% earlier this month, holds a target inflation rate of 2.0%.
Core inflation increased to 3.7% in January 2025 from 3.2% in December 2024, itself reaching its highest level since April 2024. Services inflation rose sharply to 5.0% in January 2025 from 4.4% a month prior, while goods inflation increased to 1.0% from 0.7%.
The Spin
Left narrative
The latest ONS inflation figures show a modest increase, but the government’s efforts to shield working families are clear. Measures like raising the national minimum wage and freezing fuel duty have been key in easing cost-of-living pressures. While inflation remains a challenge, the focus on boosting sustainable growth continues, aiming to strengthen the economy and ensure more money reaches people’s pockets.
Right narrative
The latest data exposes Labour’s economic mismanagement. Despite promises of growth, their policies have only fueled higher prices, leaving families and businesses struggling. Tax hikes and inflation-busting pay rises are pushing costs up across the board. With interest rates likely to remain high, Labour's misguided economic strategy is causing real pain for households, threatening stagnation and mortgage misery for millions.