Inflation has slowed once again, to 3.4 per cent in the 12 months to February, down from 4 per cent in January. This takes the inflation rate to its lowest level in two and a half years, and keeps inflation on track for the Bank’s target of 2 per cent this spring.
The fall in the headline rate was slightly bigger than expected – economists had forecast 3.5 per cent – driven by a fall in food prices, which slowed from 7 per cent on the year to January to 5 per cent in February. Restaurant and cafe prices also contributed to the falling rate: down to 6 per cent in February, compared to 7.1 per cent the month before.
All remains on track for inflation to return to the Bank’s target of 2 per cent in April, when Ofgem’s latest energy price cap kicks in and higher energy costs fall out of the data.
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