UK inflation slides to three.4%, under expectations

U.Okay. inflation got here in decrease than anticipated at 3.4% year-on-year in February, official figures confirmed Wednesday, down from 4% in January.

Month-on-month, the headline shopper value index rose by 0.6%, returning to constructive territory after a -0.6% reading in January.

Economists polled by Reuters had anticipated an annual price of three.5% for February and a month-to-month price of 0.7%, based on LSEG knowledge.

The Workplace for Nationwide Statistics mentioned the biggest downward contributions got here from meals, eating places and cafes, whereas the biggest upward stress got here from housing and gasoline.

Costs for meals and non-alcoholic drinks rose by 5% year-on-year in February, down from 7% in January and the bottom annual price since January 2022, the ONS mentioned.

“The rate has eased for the eleventh consecutive month from a recent high of 19.2% in March 2023, the highest annual rate seen for over 45 years,” it added.

The carefully watched core CPI determine — which excludes risky meals, vitality, alcohol and tobacco costs — got here in at an annual 4.5%, under a consensus estimate of 4.6% and down from 5.1% in January.

U.Okay. Finance Minister Jeremy Hunt mentioned in a press release Wednesday that falling inflation “sets the scene for better economic conditions.”

The Bank of England expects headline inflation to fall briefly again to its 2% goal within the second quarter earlier than growing once more later within the 12 months, after climbing rates of interest aggressively during the last two years as a way to get costs underneath management.

The central financial institution meets on Thursday to resolve its subsequent financial coverage transfer, and is broadly anticipated to maintain rates of interest unchanged at 5.25% because it weighs when to start reducing.