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A fall in December’s CPI inflation of 0.1 percentage points to 2.5% is marginal, but by being below expectations it delivered an above-expectations boost to Rachel Reeves.

The chancellor has been under intense scrutiny for the last week as UK borrowing costs have risen (in line with US and European peers) and the value of the pound has fallen.

While this has presented a political headache rather than the economic crisis presented by the opposition, it is no less real for a government that has made growth, stability and fiscal probity a priority.

Money blog:
What inflation drop means for you and economy

Strikingly the moves against the UK came unprompted by any fresh data to trigger a lack of confidence in the bond and currency markets.

This week that changes, with December’s inflation figures today followed on Thursday by GDP numbers for November.

In that context, this morning’s surprise on the upside will have been welcomed at the Treasury, particularly when the underlying numbers are analysed.

 

Good news from underlying figures

Core inflation, which strips out fuel and other volatile elements, fell to 3.2% from 3.5% in November, and services inflation, a key metric for the Bank of England‘s calculations, dropped 0.6% in the month to 4.4%.

Both of those falls were larger than consensus expectations and may be a sign that the ‘sticky’ inflation the Bank has consistently warned is staying its hand may be falling back.

The markets appear to think so, with expectations of a rate cut at the next Monetary Policy Committee meeting on 6 February increasing from 62% before publication, to 83% 90 minutes later.

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Sky’s Kay Burley speaks with chief secretary to the Treasury Darren Jones about the inflation figures

Warning uplift could be temporary

Borrowing costs also eased in light of the figures, with the 10 and 30-year gilt yields, which have seen 16 and 28-year highs respectively in the last week, falling back as markets opened.

If that suggests a measure of perspective returning to the UK, the chancellor still faces genuine challenges.

With the cost of servicing debt elevated, her fiscal rules remain in peril, and difficult decisions on spending will follow if they bust the OBR spreadsheet in March. And she cannot evade responsibility for loading £25bn of employment taxes on business without demonstrating that it will not, as many claim, depress growth.

In a note this morning, Pantheon Economics said it expects those measures to erase today’s good news on inflation.

The economic intelligence firm said: “Looking ahead, we expect headline inflation to rise to 2.8% in January, and then 3.2% in April as energy deflation eases, as a range of government administered and inflation-indexed prices rise and underlying services inflation persists.”

What next?

Ms Reeves will spend the next three weeks making the case for her economic plan, with a trip to the World Economic Forum in Davos next week followed by a speech on growth at the end of the month, and further staging posts in the industrial strategy, similar to the AI announcement this week.

All of which may reassure the world about Britain’s prospects, but still may not be enough.

US inflation figures, published later on Wednesday, are expected to show an increase, which may push yields up further.

And in five days Donald Trump will be in a position to begin implementing trade and tariff policies which are expected to be inflationary.

If the last week has demonstrated anything, it is that the US exerts a gravitational pull on markets the UK cannot escape.

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Southport attack victim’s teachers ‘don’t want her to be forgotten’

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Southport attack victim's teachers 'don't want her to be forgotten'

The teacher of one of the Southport stabbing victims has told Sky News they “don’t want her to be forgotten”, 10 months after the knife attack in which she was murdered.

Seven-year-old Elsie Dot Stancombe was killed along with Bebe King, six, and nine-year-old Alice da Silva Aguiar in an attack by Axel Rudakubana at a Taylor Swift-themed dance class last July.

Jennifer Sephton, headteacher of Farnborough Road Infant School, will be skydiving to raise funds for the Elsie’s Story charitable trust, which has been set up in memory of the former pupil.

Alice da Silva Aguiar, Elsie Dot Stancombe and Bebe King were murdered in an attack at a Taylor Swift-themed class.
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(L-R) Alice da Silva Aguiar, Elsie Dot Stancombe and Bebe King were killed in an attack at a Taylor Swift-themed class


“She’d been with us for four years, throughout her education,” Ms Sephton told Sky News, “and we just want everybody to know Elsie’s spirit.”

Describing Elsie as “such a determined young lady,” Ms Sephton said Elsie had “a real zest for life, and a sparkle in her eye all the time.”

She added that Elsie’s Story, which has been set up by Elsie’s family, is about “continuing that legacy.”

Jennifer Sephton
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Jennifer Sephton

In the aftermath of the July 2024 attack, the gates outside Elsie’s school were lined with flowers, balloons, and cards bearing her name.

Since then, memorial benches and a tree have been planted in the school grounds, providing pupils and staff with a place to “remember and reflect”, Ms Sefton says.

“[Elsie’s death] had such an impact on all our community,” the teacher said, “it’s had an impact on her friends, their siblings, our school as a community and our staff.”

Read more:
Southport survivor wants end to use of traditional kitchen knives

Adrian Antell
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Adrian Antell

‘We want her name to live on’

Ms Sephton will be joined in the skydive by Adrian Antell, headteacher at the adjoining junior school where Elsie had been due to start.

“Elsie was due to come to us last September,” he told Sky News, “but what we’ve learned about her is that she had a wonderful impact in the infant school, and we don’t want her to be forgotten.

“We want her name to have to live on and to be thought of in a positive way.”

Mr Antell said they continue to support Elsie’s classmates, who joined the new school without her.

“There’s no instruction manual for this,” he explained, “every day is different, and every day is one step at a time.

“So all we can do as a school is to think about individual children and support them in the best way we can.”

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Scientists embark on crucial study to save Britain’s bees

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Scientists embark on crucial study to save Britain's bees

Scientists from Kew Gardens are using a new study to track which trees bees prefer to try to stem the decline in our vital pollinators.

Bee populations are falling all over the world due to a mixture of habitat loss, climate change, and the use of pesticides, with a devastating impact on our biodiversity and food production.

But it’s feared that not enough comprehensive, global research is being done to understand the issue or find solutions.

Pollination Research Lead, Dr Janine Griffiths-Lee told Sky News “Nearly 90% of our flowering plants depend on the contribution of pollinators, but in the UK the population of flying insects in the last 20 years has decreased by around 60%. 
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The study is building up heat maps of the most popular trees


 

Now, scientists based at Wakehurst in Sussex (Kew’s “Wild Botanic Garden”) have begun placing advanced bioacoustics sensors in some of their trees, to track which ones the bees are more drawn to.
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Non-invasive monitors track the buzz created by bees’ wing beats

UK becoming a no-fly zone

Researchers based at Wakehurst in Sussex, known as Kew’s “Wild Botanic Garden”, have begun placing advanced bio-acoustics sensors in some of their trees to track which ones bees favour.

They hope it’ll help urban planners know which trees to plant in built-up areas, as a way of combating the worrying decline in bee numbers.

Pollination research lead Dr Janine Griffiths-Lee said: “Nearly 90% of our flowering plants depend on the contribution of pollinators, but in the UK the population of flying insects in the last 20 years has decreased by around 60%.

“It’s really hard to be able to put a figure on the decline of our pollinators, but we do know that globally the number is declining.

“And with that comes crop yield instability and the loss of an essential ecosystem service.”

Their new, non-invasive monitors listen for the buzz created by bees’ wing beats, building up heat maps of the most popular spots.

Read more from Sky News:
‘Grandpa robbers’ guilty over Kim Kardashian heist
Train station stabbing in Germany

bees
kew gardens
Kew scientists are using a ‘brand new’ study to track which trees bees prefer - to try and stem the decline in our vital pollinators.
Image:
Bio-acoustics sensors are placed in trees to track which ones the bees are more drawn to

‘We’re facing twin crises’

Dr Griffiths-Lee said: “If you think about the tree’s footprint, it’s very small, but they’re huge 3D structures covered in pollen and nectar, which are essential resources of pollinators.

“So we really wanted to think about which are the best trees for bees for us to plant, and that can inform landscape planners, urban architects.”

Eight different species of tree were chosen for the study, including horse chestnut and lime trees, with a mixture of native and non-native species.

The scientists have also been gathering DNA from pollen, which also helps them to map which plants and flowers the insects prefer.

Wakehurst’s director, Susan Raikes, calls the 535-acre estate a “living laboratory”, and said the project’s all about searching for nature-based solutions to the impacts of climate change.

“The stakes couldn’t be higher, really. We know that we’re facing these twin crises of biodiversity loss and climate change,” she added.

“We need to be able to understand, as the climate changes, which plants from warmer climes will be good here in the UK for pollinators in the future.

“If all of our native plants are struggling, then we need to find new sources of pollen – for us all to survive.”

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Gary Neville out of Sky Sports’ Premier League finale after ‘unprecedented action’

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Gary Neville out of Sky Sports' Premier League finale after 'unprecedented action'

Football pundit Gary Neville is to miss coverage of the Premier League finale on Sunday after being banned by Nottingham Forest, whose owner he recently criticised.

Neville had been due to commentate on Forest’s game against Chelsea on Sky Sports, which is being billed as a Champions League qualification shoot-out with both teams aiming for a top five finish.

But posting on Instagram, the former Manchester United and England defender said the broadcaster told him on Thursday that Forest “would not give me an accreditation or access to the stadium as a co-commentator”.

“I’ve had no choice but to withdraw from the coverage,” he added.

“I’ve dished out my fair share of criticism and praise in the last 14 years of doing this job and have never come close to this unprecedented action.”

Screengrab from the X feed of Sky Sports News of an incident between Nottingham Forest manager Nuno Espirito Santo and club owner Evangelos Marinakis after the Premier League match at the City Ground, Nottingham. Picture date: Sunday May 11, 2025. See PA story SOCCER Forest. Photo credit should read: Sky Sports/X/PA Wire. NOTE TO EDITORS: This handout photo may only be used in for editorial reporting purposes for the contemporaneous illustration of events, things or the people in the image or fa
Image:
Nottingham Forest owner Evangelos Marinakis (R) with manager Nuno Espirito Santo after the Premier League match against Leicester. Pic: Sky Sports News/PA

Sky backs Neville’s decision

Neville said while Forest “have every right to choose who they let into their own stadium”, it was “disappointing that a great club […] have been reduced to making such a decision”.

He said “it’s symptomatic of things that have happened over the last 12 months with the club”.

Sky Sports described Forest’s move as “an unprecedented and unwelcome step” and said it has decided “to present the game from Sky Studios in west London.

“As he was no longer able to commentate from the ground, Gary has chosen to not be part of the coverage on Sunday – a decision fully supported by Sky.”

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Kneecap release new single

Neville has been highly critical of Forest owner Evangelos Marinakis.

He described Marinakis walking on to the pitch and exchanging words with head coach Nuno Espirito Santo after the club’s draw with Leicester earlier this month as “scandalous”.

Neville urged Nuno to quit the club and his social media post further enraged Marinakis, who had threatened Sky with legal action over comments made by the pundit earlier in the season.

After Forest’s 2-0 defeat at Everton last year, the club issued a statement on social media questioning the integrity of video assistant referee Stuart Atwell after claiming they had been denied three penalties.

Neville’s response to that, comparing Forest’s actions to those of a “mafia gang”, prompted an apology from Sky after they had been contacted by Marinakis’ lawyers.

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