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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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Man arrested on suspicion of murder as three children and a woman die in house fire

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Man arrested on suspicion of murder as three children and a woman die in house fire

A man has been arrested on suspicion of murder after three children and a woman died in a house fire in Brent, northwest London.

Metropolitan Police officers are investigating after being called to assist firefighters in Stonebridge, near Wembley, shortly after 1.20am.

A 43-year-old woman and three children, a 15-year-old girl, an eight-year-old boy and a four-year-old boy, died at the scene, the force said. Their next of kin have been informed.

Police are waiting for an update on the conditions of two others who were taken to hospital.

A 41-year-old man was arrested at the scene in connection with the incident and remains in custody.

Two terraced houses in Tillett Close, Stonebridge, were involved in the fire. Pic: PA
Two terraced houses in Tillett Close, Stonebridge, were involved in the fire. Pic: PA
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Pics: PA

Eight fire engines and around 60 firefighters responded to the blaze, the London Fire Brigade (LFB) said.

Two terrace houses, each with three floors, were severely damaged in the fire, which was under control by around 3.25am, the fire service added.

Firefighters rescued the woman and one of the children from the second floor of the house, but they were declared dead by air ambulance crews.

The two other children were found inside the property and were also declared dead at the scene, LFB said.

Emergency services on the scene. Pic: PA
Emergency services on the scene. Pic: PA
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Emergency services at the scene. Pics: PA

LFB assistant commissioner Keeley Foster said: “Upon arrival, firefighters were met with a well-developed fire, involving two adjoining properties. Crews immediately set to work carrying out firefighting operations in order to bring the incident under control.

“Sadly, a woman and three children have died as a result of this fire.

“Crews wearing breathing apparatus were able to rescue the woman and one of the children from the second floor, but they were later declared deceased at the scene.

“A further two children were discovered to have died in the fire, as crews carried out a search of the properties involved.”

She added: “This is an extremely tragic incident, and the thoughts of everyone across the brigade are with those impacted by this incident.”

Two terraced houses in Tillett Close, Stonebridge, were involved in the fire. Pic: PA
Image:
Pic: PA

London Ambulance Service said an air ambulance, incident response officers, advanced paramedic and hazardous area response team were deployed to the scene.

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Superintendent Steve Allen, from the Met’s local policing team in northwest London, said: “This is an extremely tragic incident and our thoughts are with everyone involved.

“Officers arrested a man at the scene and we continue to work alongside investigators from the London Fire Brigade to establish the cause of the fire.

“Emergency services will remain in Tillett Close throughout the day as these enquiries take place.”

Mayor of London Sadiq Khan said in a post on X: “This is devastating news and my thoughts are with the family, friends and wider community of the four people who sadly have lost their lives.

“I remain in close contact with the London Fire Brigade and Metropolitan Police as they work to establish the cause of the fire and offer support to all those impacted.”

Dawn Butler, the local Labour MP for Brent East, posted: “Devastated to see the fatal fire at homes in Tillett Close last night.

“My prayers are with the family and friends affected by this is a very sad tragedy.

“@LFB_Brent worked hard to get it under control, thank you.”

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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
Image:
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.

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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.
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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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