Pressure on BoE rises as inflation hits three-year low

Likelihood of 30 January rate cut rises

The UK's core CPI measure of inflation fell unexpectedly in December to 1.3% from 1.7% on a 12-month basis, its lowest level in three years, adding to the mounting pressure on the Bank of England to cut interest rates at this month’s Monetary Policy Committee (MPC) meeting.

The ONS' latest data also shows that the 12-month CPIH rate, which includes owner occupiers' housing costs, also fell to 1.4% from 1.5% in November, primarily as a result of a downward trend in the price of accommodation services and clothing. CPIH was saved from a further fall due to minor uplifts in furniture and household goods, communications, and miscellaneous goods and services. It follows figures published by the BoE on Monday (13 January), which revealed that November saw the UK grow at its weakest rate since 2012. The publication prompted outgoing Governor of the Bank Mark Ca...