it's definitely vulnerable people — myself included — where we have to have the heating on, can't cope with the cold — i wouldn't be able to get to work. so we have to have the heating on, whether we want it on or not. and it'sjust... you dread it, you dread it. jumpers and hats. inflation has fallen sharply from the very high levels seen a couple of years ago, but now it seems to be ticking upwards again — in part because the cold winter has pushed up energy prices. the bank of england expects it to keep on rising for months to come, while the economy's barely growing.

natural gas prices are rising — not nearly to the same extent we saw a couple of years ago, but that is adding a bit of pressure to household bills once again. that's going to feed through. but elsewhere, the inflation story is still getting a little bit better. service—sector inflation — restaurants, etc — inflation�*s coming down there. yet that's cold comfort for businesses like harry king & sons. they've already seen years of rapidly rising prices, and any further increases will make it even harder to stay afloat. theo leggett, bbc news. let's dive into the detail now. kallum pickering is chief economist at peel hunt. thanks for being with us. inflation at 3% injanuary, what has been pushing it so high? what has been pushing it so hiuh? ~ what has been pushing it so hih? ~ , ., what has been pushing it so high? well, we should keep in mind that _ high? well, we should keep in mind that hasn't _ high? well, we should keep in mind that hasn't actually - high? well, we should keep in mind that hasn't actually been i mind that hasn't actually been an increase in prices between last december and this january. overall prices actually declined over that period by about 0.1%. what you have is this baseless effect, just the comparison, this january versus

last january. comparison, this january versus lastjanuary. when comparison, this january versus last january. when you comparison, this january versus lastjanuary. when you look across the basket, actually very little has happened. it doesn't change the fact that inflation is about to pick up, but at least these january numbers look much worse than they actually are, relative to where we were in december. 50 where we were in december. so where we were in december. so where does that leave us with the cost of borrowing here in the cost of borrowing here in the uk? obviously that is closely linked to the rate of inflation. . �* , closely linked to the rate of inflation-— inflation. that's right. the bank of england _ inflation. that's right. the bank of england would - inflation. that's right. the | bank of england would like inflation. that's right. the . bank of england would like to get interest rates down but they are cautious because we all remember what happened last time. a bit of inflation turned into a lot of inflation. i still think the bank of england will look at the underlying fundamentals in the economy and say prices over time will trend lower, even if we have this pump due to energy prices this year, and so i think we will probably get to more interest rate cuts this year. march is too soon. probably may and then august and then towards the end of the year, let's see how much inflation the bank of england has to deal with and they will decide whether they can go further or not.— decide whether they can go further or not. because there are a lot _ further or not. because there are a lot more _ further or not. because there are a lot more inflationary . are a lot more inflationary factors on the horizon coming in april when the energy price

cap changes and also those new employer tax increases come into effect. how bad could it get? into effect. how bad could it net? ~ . into effect. how bad could it iet? . ., ., , into effect. how bad could it net? ~ . ., , . get? well, we have to be a little careful. _ get? well, we have to be a little careful. i _ get? well, we have to be a little careful. i find - get? well, we have to be a little careful. i find that - little careful. i find that thinking around this is muddled. people seem to be afraid of no growth, unemployment and inflation, basically everything goes wrong. it will not be like that. we will either have pricing power because the economy is strong, in which case we have an inflation problem but probably not an unemployment because firms can pass those costs onto consumers. all we have much less inflation in which case the bank of england can react. this is very different from 2022. stagflation is not the right word. it is unlikely to be what we see here. there are also difficult _ be what we see here. there are also difficult to _ be what we see here. there are also difficult to measure - be what we see here. there are also difficult to measure risks l also difficult to measure risks on the horizon. geopolitical risks. when you look at what is happening in gaza but also when you look at the potential, the beginnings of a negotiation on

a russia ukraine peace deal. how could that play out when it comes to the prices we pay at the shops? comes to the prices we pay at the show?— comes to the prices we pay at the sham?— the shops? that is a great question- _ the shops? that is a great question. when _ the shops? that is a great question. when it - the shops? that is a great question. when it comes l the shops? that is a great. question. when it comes to the shops? that is a great - question. when it comes to the gazaissue, question. when it comes to the gaza issue, i don't think it is playing a major role in shaping global commodity and energy prices. it hasn't been as destructive to energy markets as previous middle east conflicts have been. when it comes to russia and ukraine, if we work to get some end of fighting, what you would find is markets would take off considerable inflation risk. we would hope at some point, some russian gas may find its way into parts of europe to bring into parts of europe to bring in global gas prices so that will probably be positive for inflation and help interest rates, lower. but if they don't get a settlement, then we would be worried about risks in the other direction.— other direction. kallum pickering _ other direction. kallum pickering from - other direction. kallum pickering from peel- other direction. kallum i pickering from peel hunt, other direction. kallum - pickering from peel hunt, thank you for that. president trump has launched another salvo in his ongoing trade war.

tariffs of around 25% on car imports, along with similar duties on pharmaceuticals and computer chips. it's the latest set of measures that are threatening to upend international trade. trump says us carmakers are being treated unfairly in foreign markets, and that his policies will bring jobs back to america. this will bring jobs back to america. because of what we're doing economically and through tariffs and taxes and incentives, they want to come back into the united states. and we'll be announcing various very large companies — the biggest, actually — and they'll be coming back having to do with chips and having to do also with cars and lots of other things. we're going to be announcing some very, very big... very big, momentous — i think momentous — decisions being made by companies all around the world — the biggest — and they want to come back into the us. car plants are being cancelled in other locations now

because they want to build them here. trump told reporters that "new car plants are being cancelled" in other parts of the world because "they want to build them here now". we haven't been able to find any evidence of that. earlier i asked tom stevenson, investment director at fidelity, if he'd seen any evidence of manufacturers changing their plans. well, i think it's early days yet, isn't it? i mean, these things take time, you can't just flick a switch and decide to shift your production from one side of the world to the other side of the world. but, you know, on the tariffs themselves you can absolutely understand what donald trump is doing here, there is a mismatch on the automotive tariffs in particular. europe charges a 10% tariff on us car imports into europe. that is four times as much as the at the same time, pick—up trucks, big vehicles like that, attract a 25% tariff into the us currently, and that is why that part of the market is such

a profitable area for the big detroit manufacturers, so you can see why donald trump would want to extend that tariff regime to all cars, to support the us manufacturing of cars. yeah, you are right, facts are facts and there is currently a mismatch in the tariffs on cars imported across the atlantic between america and europe, but worth

that means that wednesday night into thursday is frost—free. in fact, some areas could have temperatures around 10 degrees overnight. we've not been having that having that during the daytime. now, here's thursday itself. a large area of low pressure just parked to the south of greenland there, pushing strong winds across the uk. and with that, of course, weather fronts, outbreaks of rain, a lot of cloud across the uk. the driest of our weather will probably be the further south—east you are. but the outbreaks of rain

could be quite heavy at times.