UK’s INFLATION REPORT FOR FEBRUARY 2025

Amongst other important data points on the radar this week, the UK inflation report, measured by the Consumer Price Index (CPI y/y) is set for release today Wednesday the 26th of March 2025 at 11am GMT +4.
This upcoming release will provide insights into the country's inflation trends, influencing economic policy and financial markets. ​As of January 2025, the UK's inflation rate stood at 3.0%, up from 2.5% in December 2024. 
In view of the upcoming data release, there is wide anticipation that February’s reading would match up with January’s report of 3.0%.
Meanwhile, the Bank of England projects that inflation may rise to 3.7% by summer 2025. ​ 
These figures are subject to change based on upcoming economic developments and data releases.

POST GLOBAL CENTRAL BANK WEEK
Last week, several major central banks announced their interest rate decisions, shaping market movements in the cause of the week.
Starting with the Bank of Japan (BOJ), On the 19th of March 19, 2025, kept its interest rate steady at 0.5%. Hence prioritizing economic growth concerns over inflation, which had reached 4%. This decision followed the January 24, 2025, rate hike being the third since the BOJ ended its negative interest rate policy in March 2024—amid escalating trade tensions. Similarly, the U.S. Federal Reserve (FED) held its rate steady at 4.25-4.50%, maintaining its cautious stance amid persistent inflation and economic uncertainties. Markets focuses on future policy signal. Whereas 89.2% has been priced in for steady rate at next policy meeting, while analyst predicts that the Fed would likely cut rate twice this year.
Meanwhile, on the 20th of March, the Swiss National Bank (SNB) reduced its key policy interest rate by 25bps up from 0.50% to 0.25%, marking its fifth consecutive rate cut since March of last year. The decision to reduce rate was influenced by persistently low inflation, which reached 0.3% in February, and aims to maintain appropriate monetary conditions amid global economic uncertainties. 
As widely expected, the Bank of England (BoE) and Sveriges Riksbank kept rates unchanged at 4.5% and 2.25%, respectively.
Meanwhile, in the Bank of Japan's (BoJ) Monetary Policy Committee (MPC), eight out of nine members voted to maintain the rate, while one member favored a 25bps cut. The decision to hold rates steady reflects a cautious approach amid ongoing economic uncertainties and inflationary pressures.

THE UK ANNUAL CPI INFLATION RATE REACHED ITS HIGHEST LEVEL SINCE MARCH 2024.
The UK’s preferred inflation measure, CPIH (Consumer Prices Index including owner occupiers' housing costs), rose 3.9% year-on-year in January 2025, up from 3.5% in December 2024. On a monthly basis, CPIH remained steady, unlike the 0.4% decline in January 2024.
Whereas, the owner occupiers' housing costs (OOH) component rose 8.0% year-on-year, unchanged from December, tying the highest annual rate since February 1992. Month-on-month, OOH costs increased 0.4%, mirroring last year’s rate.
Meanwhile, the Consumer Prices Index (CPI) climbed 3.0% year-on-year in January 2025, up from 2.5% in December. On a monthly basis, CPI fell 0.1%, a smaller decline compared to the 0.6% drop in January 2024. While both CPIH and CPI share common inflation drivers, OOH costs—accounting for 17% of CPIH—primarily explain the difference between the two inflation measures.
Conclusively, the UK’s February inflation report is expected to remain steady at 3.0%, aligning with January's figure, which could prompt policymakers to act.