UK inflation hits 3.4% as BoE weighs February rate cut
[00:00] Hannah Whitmore: From Neural Newscast, I'm Hannah Whitmore.
[00:03] Jonah Klein: And I'm Jonah Klein.
[00:04] Hannah Whitmore: Today is January 31st, 2026.
[00:09] Hannah Whitmore: Coming up, UK inflation ticks higher and the Bank of England faces a tighter decision window.
[00:17] Jonah Klein: Social media analysis.
[00:19] Jonah Klein: We will also break down what is actually getting more expensive.
[00:24] Jonah Klein: and what that signals for rate cuts and household budgets in 2026.
[00:29] Hannah Whitmore: The latest numbers show UK inflation rose to 3.4% in December.
[00:36] Hannah Whitmore: That is a bit above forecasts, and it complicates a February rate cut.
[00:42] Hannah Whitmore: The Office for National Statistics says the increase is partly driven by tobacco prices
[00:49] Hannah Whitmore: after new excise duty increases.
[00:53] Hannah Whitmore: Airfares also climbed from a year ago, tied to the timing of holiday travel.
[00:59] Jonah Klein: Social media analysis?
[01:01] Jonah Klein: All right.
[01:02] Jonah Klein: The detail that jumps out is core inflation.
[01:06] Jonah Klein: Strip out energy, food, alcohol, and tobacco.
[01:10] Jonah Klein: And core holds at 3.2%, unchanged from November.
[01:16] Jonah Klein: Social media analysis?
[01:18] Jonah Klein: I hope my myths.
[01:20] Jonah Klein: That steadiness matters for the Bank of England because it suggests the underlying trend is not re-accelerating, even with a higher headline number.
[01:30] Hannah Whitmore: Chancellor Rachel Reeves says the central expectation is still for inflation to cool into spring and summer toward the Bank of England target of 2%.
[01:42] Hannah Whitmore: She links that outlook to measures in last year's budget.
[01:46] Hannah Whitmore: Still, this uptick comes after signs of cooling in the labor market.
[01:52] Hannah Whitmore: That mix can leave policymakers debating whether to cut in February, or wait for more 2026
[02:01] Jonah Klein: data.
[02:01] Jonah Klein: Turning now to what it means day to day, some of the biggest pushes are in specific categories,
[02:07] Jonah Klein: not everything all at once.
[02:09] Jonah Klein: Tobacco taxes are a direct policy-driven hit, and airfare prices can swing with calendar
[02:15] Jonah Klein: Social media analysis.
[02:18] Jonah Klein: Oh, food costs also show up, especially bread and cereals.
[02:23] Jonah Klein: For listeners, that is the kind of change that feels immediate because it hits the weekly
[02:29] Jonah Klein: shop.
[02:29] Hannah Whitmore: Their offsets, too.
[02:32] Hannah Whitmore: The ONS points to slower rent inflation and lower prices for some recreational and cultural
[02:40] Hannah Whitmore: purchases.
[02:41] Hannah Whitmore: Thank you.
[02:41] Hannah Whitmore: That helps keep the overall picture from running away.
[02:45] Jonah Klein: Social media analysis? Awesome!
[02:48] Jonah Klein: Markets are also watching wage growth.
[02:51] Jonah Klein: If pay growth keeps easing and the jobs data stays soft,
[02:55] Jonah Klein: it strengthens the case for cuts later this year,
[02:58] Jonah Klein: even if February remains uncertain.
[03:01] Hannah Whitmore: Agriculture reporting with a steady, grounded tone.
[03:05] Hannah Whitmore: Keep the framing practical and community focused.
[03:09] Hannah Whitmore: Warm closing identification, I'm Hannah Whitmore.
[03:14] Jonah Klein: Social media analysis with an upbeat, conversational tone and smart cultural fluency.
[03:21] Jonah Klein: Keep reactions playful and clear.
[03:24] Jonah Klein: And I'm Jonah Klein.
[03:25] Jonah Klein: Social media analysis.
[03:28] Jonah Klein: Such a good time.
[03:29] Jonah Klein: Oh yeah, lots of people are talking about that.
[03:32] Jonah Klein: Neural Newscast is AI-assisted, human-reviewed.
[03:37] Jonah Klein: View our AI Transparency Policy at neuralnewscast.com.
