Pinch on finances eases as inflation falls

Pinch on finances eases as inflation falls

Talking about it, the ONS's Phil Gooding said: "Hotel prices also fell and the cost of ferry tickets rose more slowly than a year ago, when prices were collected on Valentine's Day when many people could have been taking mini-breaks".

However, economists and the Bank of England believe inflation's upward march has run its course and will start to unwind over the coming months.

The outcome was lower than the 2.8% predicted by economists and marked the first fall in inflation since December 2017.

The level of inflation fell in February, with the worst of the Brexit driven prices increases seen in the United Kingdom in the last 18 months now appearing to be over.

Food prices were also applying downward pressure, lifting 0.1% between January and February in contrast to a 0.8% rise the year before.

The consumer prices index, the UK's headline measure of inflation, fell to 2.7 per cent, down from 3 per cent in December and January and the lowest since July previous year.

Motor fuels and food costs look set to be the main drivers behind inflation's fall, as a push from supermarkets to pass higher import prices down to consumers starts to wane.

The figures come two days before the Bank of England's next interest rate decision and are unlikely to change expectations about the timing of the next hike - with many experts pencilling in May for the next rate rise.

The latest fall is partly attributed to a fall in petrol prices. It is widely expected to say on Thursday that it will keep rates on hold for now, and stick with a plan to raise borrowing costs only gradually.

It comes after the Office for Budget Responsibility hiked its outlook for economic growth this year, to 1.5%, from 1.4% previously predicted, in its Spring Statement forecasts. This was the weakest since last July, when prices rose 2.6%.

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