Food and eating out costs drive fall in inflation

February’s drop to 3.4% means the cost of living is now rising at its slowest pace since September 2021.
Food and eating out costs drive fall in inflation
Women looking at food on supermarket shelfGetty Images

Inflation fell to 3.4% in February, down from 4% in January and edging closer to the Bank’s target of 2%.

The drop means the cost of living is rising at its slowest pace since September 2021, when it stood at 3.1%.

Inflation, the rate at which prices rise over time, has been gradually falling since it hit 11.1% in October 2022, its highest rate for 40 years.

The Office for National Statistics (ONS) said food price inflation was the main reason for the drop.

However, prices are not yet falling they are just rising less quickly than they were previously.

Most economists had predicted the drop and said it would further expectations that the Bank of England will cut interest rates later in the year.

The figure comes ahead of its latest interest rate decision on Thursday, which is expected to see rates held at 5.25%.

While the drop in inflation will be welcomed by the government it follows official data last month which confirmed that the UK fell into recession at the end of last year.

Grant Fitzner, chief economist at the ONS, said one of the reasons for the bigger than expected drop in last month’s figure was the fall in food price inflation which had come down “quite a bit” from 6.9% to 5%.

UK inflation chart

“That’s 11 consecutive monthly falls… in fact we haven’t really seen much change in food prices for the last nine months, they’ve been almost flat,” he said.

“These falls were only partially offset by price rises at the pump and a further increase in rental costs.

“But the general trend continues to be lower,” Mr Fitzner said.

While the ONS did not reflect drops in energy prices in its calculations the economist said the Bank of England and the Office for Budget Responsibility were projecting further falls in inflation.

Source: bbc.co.uk

Total
0
Shares
Leave a Reply

Your email address will not be published. Required fields are marked *

Prev
Latest inflation figures to be announced – BBC News
Latest inflation figures to be announced - BBC News

Latest inflation figures to be announced – BBC News

The latest figures are due to be published at 07:00 by the Office for National

Next
Greggs hit by IT issue affecting card payments
Greggs hit by IT issue affecting card payments

Greggs hit by IT issue affecting card payments

Some shops are closed as the bakery chain says it is working to resolve the

You May Also Like