PwC comments on the latest ONS CPI figures - February 2026

Commenting on the Office of National Statistics Consumer Price Index for January 2026, Adam Deasy, Economist at PwC UK, says:

“The larger-than-expected increase in CPI inflation in December 2025 has been largely undone, with January’s year-on-year measure dropping 0.4 percentage points to 3.0%. Some of the more volatile seasonal factors had a big impact, such as the timings of flights chosen for the ONS’s data collection, leading to Transport and Food subsectors driving a large portion of the decrease.

“Disinflation remains uneven. Goods prices are cooling more decisively, while services inflation is proving stickier. For markets and the Bank of England, the key question is not the headline drop, but whether underlying inflation is moderating. There are signs this is happening; Tuesday’s labour market data indicating a continued loosening, while pay growth is moving closer to levels consistent with 2% inflation and underlying GDP growth is subdued. 

“February’s MPC vote was finely balanced, with a majority of 5-4 in favour of maintaining rates at 3.75%. The more the rest of the economy stutters, the more downward inflation pressures grow, and the trigger finger of the MPC will itch only stronger. A March rate cut, while not guaranteed, will be in the sights of the Bank.”