ICAEW.com works better with JavaScript enabled.

Suren Thiru: Surprise inflation fall makes February interest rate cut more likely

Author: ICAEW

Published: 15 Jan 2025

Suren Thiru, ICAEW Economics Director, responded to the UK inflation figures for December 2024, released by the Office for National Statistics today (Wednesday 15 January 2025) and said: 

“While this surprise decline provides some timely respite amid the financial markets turmoil, with the headline rate still decisively above the Bank of England’s 2% target and domestic and international inflation headwinds growing, any relief may be short lived.

“Despite December’s unexpected decline, the near-term outlook for UK inflation remains ominous with higher energy bills likely to push the headline rate above 3% over the coming months, aided by April’s expected rise on Ofgem’s energy price cap.

“Inflation could drift gradually lower in the second half of 2025, if the likely downward pressure on prices from slowing wage growth and a weakening labour market is not derailed by higher, more volatile global prices.

“While these figures make a February interest rate cut more likely, concerns over the current market turbulence and heightened global inflation risks mean the decision of whether to loosen policy next month is not quite nailed on yet.”

ENDS

Notes to editors:

About ICAEW

Chartered accountants are talented, ethical and committed professionals. ICAEW represents more than 208,000 members and students around the world.

Founded in 1880, ICAEW has a long history of serving the public interest and we continue to work with governments, regulators and business leaders globally. And, as a world-leading improvement regulator, we supervise and monitor around 12,000 firms, holding them, and all ICAEW members and students, to the highest standards of professional competency and conduct.

We promote inclusivity, diversity and fairness and we give talented professionals the skills and values they need to build resilient businesses, economies and societies, while ensuring our planet’s resources are managed sustainably.

ICAEW is the first major professional body to be carbon neutral, demonstrating our commitment to tackle climate change and supporting UN Sustainable Development Goal 13.

ICAEW is a founding member of Chartered Accountants Worldwide (CAW), a global family that connects more than 1.8m chartered accountants and students in more than 190 countries. Together, we support, develop and promote the role of chartered accountants as trusted business leaders, difference makers and advisers.

We believe that chartered accountancy can be a force for positive change. By sharing our insight, expertise and understanding we can help to create sustainable economies and a better future for all.

Further information

Contact us
Swoop background image
Media relations

Our Media Relations team can be contacted for comment, opinion and information on issues affecting the accountancy profession, business and the wider economy.

Find out more
About ICAEW
Diverse group of people looking up
Who we are

As a global professional body for chartered accountants, we ensure all our chartered accountants have the knowledge and values to help build local and global economies that are sustainable, accountable and fair.

Find out more