UK inflation ran hotter than economists anticipated in the latest release, with roughly 46% of the goods and services basket rising at an annualised rate above 2.5%. Food prices remained a notable source of upward pressure, while core services and goods inflation were described as only "ok-ish." Money-market traders responded by trimming expectations for Bank of England rate cuts. Pricing now implies about 49 basis points of easing over the remainder of 2025, down from just over 50 basis points before the data and roughly half a percentage point that had been expected earlier in the week. Analysts still see the central bank starting a gradual cutting cycle later this year, citing a softening labour market, but the hotter inflation print is prompting investors to reassess the pace at which policy could move toward an eventual rate near 3%.