The UK inflation rate has fallen to 3% in the year to January, down from 3.4% in December, according to the ONS. Economists had predicted the drop, which was driven partly by lower prices for bread, cereals, petrol, meat, and airfares. However, inflation remains above the Bank of England’s 2% target, meaning prices are still rising, just more slowly. Rachel Reeves said government decisions in the November Budget are helping ease pressure on households, while Keir Starmer described cutting the cost of living as his top priority. Critics argue many families are still struggling, pointing to higher unemployment and ongoing business pressures. Some small business owners say transport, employment, and ingredient costs continue to squeeze margins. Energy bills may also fall this spring, with forecasts suggesting a 7% drop in the price cap. Analysts now believe the downward trend could prompt an interest rate cut in March. While the direction is encouraging, many households remain mindful that prices are still significantly higher than five years ago.