UK Core Inflation Rate YoY: January 2026 Update

The UK’s core inflation rate eased to 3.1% year-over-year in January 2026, according to the latest release. This marks a slight deceleration from December’s 3.2% and continues a gradual downward trend seen since mid-2025. The reading remains above the central bank’s target, keeping monetary policy in focus as markets weigh the persistence of underlying price pressures.

Table of Contents

• Big-Picture Snapshot
• Foundational Indicators
• Chart Dynamics
• Forward Outlook
• Closing Thoughts

Chart Dynamics

January’s 3.1% core inflation print edged down from December’s 3.2%, extending a nine-month cooling streak. The 12-month average sits at 3.5%, with the latest figure marking a 0.7 percentage point drop from the May 2025 high. The pace of disinflation has slowed since autumn, with monthly declines narrowing from 0.3pp in June to just 0.1pp in January.

Compared to July’s 3.7% and September’s 3.6%, the current level underscores persistent but easing price pressures. The trend reflects broad-based moderation, though services and housing remain sticky.

What This Chart Tells Us: The chart highlights a clear downtrend in UK core inflation since mid-2025, though the rate of decline has moderated in recent months. Persistent services and housing costs are slowing progress toward the central bank’s target, keeping the inflation outlook finely balanced.

Key Markets Reacting to Core Inflation Rate YoY

Movements in UK core inflation ripple across global markets, influencing currencies, equities, and even crypto assets. The following symbols have shown notable sensitivity to recent inflation prints, reflecting shifts in rate expectations and risk sentiment. Each symbol below is verified as tradable on Sigmanomics and links directly to its market page.

• AAPL — Apple shares often react to global inflation trends, as UK inflation impacts global supply chains and consumer demand.
• GBPUSD — The pound-dollar pair is highly sensitive to UK inflation data, with softer prints typically weighing on sterling.
• BTCUSD — Bitcoin’s price can reflect shifts in inflation expectations, as investors seek alternatives to fiat currencies during periods of persistent inflation.

FAQ: UK Core Inflation Rate YoY: January 2026 Update

What is the latest UK core inflation rate?

The UK core inflation rate for January 2026 is 3.1% year-over-year, down from 3.2% in December.

How does this month’s reading compare to recent trends?

January’s figure marks the lowest level since May 2023 and continues a steady decline from the 3.8% peak in mid-2025.

What does “core inflation” mean in this context?

Core inflation excludes volatile food and energy prices, providing a clearer view of underlying price trends in the UK economy.

UK core inflation’s steady moderation signals progress, but sticky services and housing costs keep the figure above target.

Updated 2/18/26

This has been drafted with AI assistance and then thoroughly reviewed, refined, and approved by our human editorial team to ensure accuracy, and originality.

1. Sigmanomics UK Core Inflation Rate YoY database, accessed 2/18/26
2. UK Office for National Statistics, Consumer Price Inflation, January 2026 release