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Macro EconomyMedium•18 February 2026•

1 min read

UK Inflation Eases to 3.0% Driving London Stocks to Record Highs

An older Black man in a red cap and glasses stands between the Nigerian and UK flags, with gold bars, coins, and banknotes in the foreground. Cityscapes and financial charts with upward and downward a

UK headline inflation eased to 3.0% in January, aligning perfectly with economist expectations and signaling a cooling economy. This slowdown in price pressures, combined with softer labor market data, propelled London stocks to reach new record highs. The market is increasingly pricing in earlier interest rate cuts by the Bank of England (BoE) as inflationary risks continue to subside. Meanwhile, in the Eurozone, renewed reports regarding Christine Lagarde’s future have reignited discussions about leadership succession at the European Central Bank (ECB). These developments have created a mixed environment for currency markets, impacting the trajectory of both the GBP and EUR against the US dollar.