UK inflation has fallen back to 2.8%, in a boost to Rachel Reeves a few hours before she makes her spring statement.
The Office for National Statistics said annual inflation as measured by the consumer prices index cooled last month, dropping from 3% in January.
That slightly lowers the cost of living pressure on families but also means prices are still rising faster than the Bank of England’s 2% target.
On a monthly basis, CPI rose by 0.4% in February 2025, compared with a rise of 0.6% in February 2024.
The largest downward contribution came from clothing, the ONS reports.
Overall prices for clothing and footwear fell by 0.6% in the 12 months to February 2025, compared with a rise of 1.8% in the 12 months to January.
February’s figure was the first negative annual rate since October 2021 and was because of more discounting by retailers as they tried to shift stock.
The inflation report said: "The easing in the annual rate was mainly the result of a large downward effect from garments for women, with small downward effects coming from a range of women’s clothing items.
"There were additional small downward effects from children’s clothing, and other clothing and clothing accessories, such as hats and women’s scarves."
The ONS chief economist, Grant Fitzner, reports that alcoholic drinks prices have risen: “Inflation eased in February. Clothing prices, particularly for women’s clothes, was the biggest driver for this month’s fall.
“This was only partially offset by small increases, for example, from alcoholic drinks.”
Today’s UK inflation report shows that prices of alcohol and tobacco rose by 5.7% in the year to February, up from 4.9% in January.
Core inflation has also slowed in February despite prices rising steadily in the services sector.
Core CPI (which excludes energy, food, alcohol and tobacco) rose by 3.5% in the 12 months to February 2025, down from 3.7% in the 12 months to January.
The CPI goods annual rate slowed from 1% to 0.8%, while the CPI services annual rate was unchanged at 5%.
The agenda
• 9.30am GMT: UK house prices and rents report
• 12.30pm GMT: Rachel Reeves makes spring statement
• 1pm GMT (approx): Office for Budget Responsibility publishes its latest economic and fiscal outlook
We'll be tracking all the main events throughout the day … |
