THE UK’S rate of inflation has fallen in February.
The Office for National Statistics (ONS) said the Consumer Price Index (CPI) measured 2.8% in the 12 months to February.
This is compared to a reading of 3% in the 12 months to January, the highest the figure reached in 10 months.
Experts at the ONS said the fall was helped by a drop in women’s clothing prices.
However this was offset slightly by a rise in the cost of alcoholic drinks.
Inflation is a measure of how much the prices of everyday goods such as food and clothes, and services such as train tickets and haircuts, have increased compared to a year earlier.
When inflation rises it means prices are going up at a faster pace than the month before.
Today’s figure is still above the Bank of England‘s target of 2%.
Meanwhile, inflation is expected to hit 3.7% in the summer, driven by increases in the price of energy and food.
The ONS’s latest data also reveals core CPI inflation, which strips out energy, food, alcohol and tobacco, rose 4.4% in the 12 months to February 2025, down from 4.6% in the 12 months to January.
Elsewhere, the rate at which the cost of food and groceries increase remained the same 3.3%.
Grant Fitzner, chief Eeonomist at the ONS, said: “Clothing prices, particularly for women’s clothes, was the biggest driver for this month’s fall.
[bc_video account_id=”5067014667001″ application_id=”” aspect_ratio=”16:9″ autoplay=”” caption=”Understanding GDP and Its Impact on the Economy” embed=”in-page” experience_id=”” height=”100%” language_detection=”” max_height=”360px” max_width=”640px” min_width=”0px” mute=”” padding_top=”56%” picture_in_picture=”” player_id=”default” playlist_id=”” playsinline=”” sizing=”responsive” video_id=”6355832489112″ video_ids=”” width=”640px”]“This was only partially offset by small increases, for example, from alcoholic drinks.”
Today’s inflation drop comes just hours before Chancellor Rachel Reeves will unveil her Spring Statement.
The head of finance for the UK is expected to announce further spending cuts to Government departments in a bid to balance the books.
She is also expected to reveal the impact of £5billion worth of spending cuts to the UK’s welfare system.
WHAT IT MEANS FOR YOUR MONEY
Falling inflation is often good news for households, but experts have warned that many Brits are not out of the woods yet.
Next month millions across the UK will be have to absorb a raft of hikes from higher energy, water and broadband bills alongside rises in council tax, car tax and stamp duty.
[boxout headline=”WHAT INFLATION FIGURES REALLY MEAN” intro=”By ASHLEY ARMSTRONG”]In a small boost for the Chancellor ahead of her big day, official figures show the rate of price increases has eased. Inflation slowed to 2.8 per cent in February, down from 3 per cent in January.
However, it’s not enough to start doing victory laps. The lower inflation has been largely driven by falling prices of women’s clothing and footwear – which is because shops have had to discount heavily to revive their sales.
This actually signals a weak consumer environment and more bad news for the retail sector ahead of a whammy of extra costs next month.
Most economists expect inflation to tick back higher and end the year around 3.7 per cent as businesses pass on higher staffing costs, caused by the Chancellor’s Autumn Budget.
The slip in inflation is also unlikely to be enough to encourage the Bank of England to lower interest rates soon either as the closely watched services inflation is still stubbornly high at 5.7 per cent.
Alice Haine, personal finance analyst at Bestinvest by Evelyn Partners, said that April will be a “crunch month” for personal finances.
She explained that reviewing household budgets will be a “key strategy” for households to ensure they are “fully prepared for the uptick in bills”.
“Cutbacks may be necessary to avoid paying bills on credit cards or running up overdrafts to make ends meet.”
The news comes just days after the Bank of England decided to maintain the base rate at 4.5%.
Lenders use the base rate to determine the interest rates offered to customers on savings and borrowing costs, including mortgages.
Alice added predictions that inflation will hit 3.75% could interest rates to stay higher for longer as the central bank to keep “inflationary pressures at bay”.
She said: “[This] is evident from its decision to keep the base rate at 4.5% earlier this month – not great news for households weighed down by heavy debts or oversized mortgages.”
Meanwhile those looking to save some cash have been told “take advantage of bumper savings rates”.
Alice added: “The latest dip in inflation means that more savings deals will beat inflation but remember, it is the post-tax net return on that cash that is key.”