Annualised inflation came in at 2.8% in February, down from the 3% reported in January.
Annualised inflation was forecast to come in at 2.9% (Trading Economics).
Core Inflation came in at 3.5% in the 12 months to February, down from the 3.7% in January and lower than forecast.
Nicholas Hyett, Investment Manager, Wealth Club said, “Falling inflation is a welcome bit of good news.
“While not yet back at the Bank of England’s 2% target, the faster than expected decline in inflation opens the door to interest rate cuts in the future should the Bank feel the wider economy needs a helping hand.
“That could be needed, since there are potential readings of a lower inflation rate that are less than positive.
“While falling inflation might reflect improvements in supply, as wider economic shocks subside and supply chains adjust, it could equally reflect a drying up in demand due to economic weakness.
“However, the challenge for Chancellor in the Spring Statement is the pockets where inflation remains high are likely to be particularly painful for voters. Rental costs rose 7.4% in the year to February, lower than last month but still exceptionally high. Looming changes to National Insurance and the National Living Wage will likely push prices across the board higher again in April.
“As with every piece of data at the moment, even a silver cloud seems to come with a gloomy lining.”
