Must read: UK inflation, Netflix earnings
ii’s head of investment rounds up the morning’s big news.
21st January 2026 09:20
by Victoria Scholar from interactive investor
UK INFLATION
UK inflation rose to 3.4% in the 12 months to December, above expectations for 3.3% and the first increase since July. It follows November’s notable drop in consumer price inflation (CPI) to 3.2%.
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Service sector inflation however met expectations, rising to 4.5% from 4.4% last month, and core CPI (stripping out the more volatile components) hit 3.2%, unchanged month on month. Factory gate price inflation was also unchanged at 3.4% while the cost of raw materials rose by 0.8%, slowing from 1.1% in November.
Consumers seized the Christmas spirit last month, with alcohol and tobacco, restaurants and hotels, and transport prices pushing CPI higher in December. The end of the year is seasonally a strong period for spending, with more consumers willing to splash out around Christmas, and businesses setting higher prices to capitalise on this.
Although inflation ticked higher in December, the longer-term outlook is for it to ease back towards the 2% target this year. Today’s uptick confirms forecasts that the Bank of England is unlikely to cut interest rates at its next meeting.
NETFLIX
Netflix Inc (NASDAQ:NFLX) reported fourth-quarter earnings and revenue that beat expectations and announced subscriber growth of nearly 8%, surpassing 325 million.
However, it expects to increase program spending by 10% this year, which could hit earnings and its current-quarter forecast for earnings per share was light of expectations, sending shares lower after hours. The deal with Warner Brothers could also add $275 million to costs this year.
Since the announcement of a potential deal, shares in Netflix have been under pressure, with the stock falling further in the post-market session last night. Just yesterday, Netflix sweetened its offer from cash and shares to all cash in its attempt to fend off competition from Paramount Skydance.
Netflix enjoyed a strong fourth quarter, thanks to popular programs like Stranger Things 5, KPop Demon Hunter and Squid Games 3. However, investors are feeling uncertain towards its 2026 outlook, with rising costs associated with increased program spending and the potential Warner Brothers deal. And its 2025 subscriber growth slowed from the previous year, highlighting the challenge of maintaining the pace of customer acquisition over time amid a highly competitive streaming market.
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