IPPR - Sharp falls in inflation and a cooling economy demands action from the Bank of England, says IPPR | Think Tanks

Wednesday 18 Feb 2026 @ 14:25
Think Tanks

IPPR - Sharp falls in inflation and a cooling economy demands action from the Bank of England, says IPPR

William Ellis, senior economist at IPPR responds to the latest inflation statistics

“Inflation fell sharply to 3 per cent in January - led by slowing transport and food prices - as factors behind the temporary bump in December faded away.

“This is part of a longer-term trend, following a wider cooling in the economy. Inflation is down 0.8 percentage points since September, pay growth has slowed, and unemployment just reached its highest rate in nearly five years. Measures announced in the Autumn Budget, such as support on energy bills and fuel duty, will also help to keep inflation down over the coming months.

“Despite this, the Bank of England’s monetary policy stance is removing demand from the UK economy and lowering growth. A further cut to interest rates will be needed in March to improve sluggish economic growth and ensure that inflation doesn’t drop below target.”

NOTES TO EDITORS

IPPR is the UK’s most influential think tank, with alumni in Downing Street, the cabinet and parliament. We are the ideas factory behind many of the current government’s flagship policies, including changes to fiscal rules, the creation of a National Wealth Fund, GB Energy, devolution, and reforms to the NHS. IPPR is an independent charity which has seconded staff to government departments including DHSC and DESNZ to support ministers on crucial policies such as the 10-year health plan and the industrial strategy: www.ippr.org

Inflation and price indices

Original article link: https://www.ippr.org/media-office/sharp-falls-in-inflation-and-a-cooling-economy-demands-action-from-the-bank-of-england-says-ippr

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