UK inflation eased to a seven-month low in February, helped by a fall in petrol prices and smaller rises in food and transport costs than the previous year, the Office for National Statistics said on Tuesday.
Consumer price inflation slowed more than expected to 2.7% in February from 3% in January. This was the weakest since last July, when prices rose 2.6%. Economists had forecast an annual rate of 2.8%.
Core inflation that excludes energy, food, alcoholic beverages and tobacco, eased to 2.4% from 2.7% in the previous month. Core prices were expected to gain 2.5%.
Retail price inflation was also lower than expected at 3.6%, against a rise of 4% in January year on year.
Laith Khalaf, Senior Analyst, Hargreaves Lansdown said: "It looks like the impact of a weaker pound is finally wearing off and inflation is gradually heading back towards target. In theory that relieves some of the pressure on the Bank of England to raise interest rates, though falling inflation is very much in their script, so these latest figures don’t really alter what we can expect from the Bank in the coming months."
Above-target UK inflation has problematic for the Bank of England and the Government since the Brexit vote, amid fears that the fall in the pound has increased the cost of goods sourced overseas.
Inflation has been running above wage increases for a number of months, meaning that the cost of living is outstripping workers' average pay packets. So today's news will be welcomed by hard-pressed British consumers. Tomorrow's job and inflation figures are likely to show that wages are still lagging behind the rise in the cost of living.
In last week’s Spring Statement, Chancellor Philip Hammond said that inflation should soon move towards the Bank’s 2% target over the next 12 months.
The Bank of England meets this week and is expected to keep interest rates on hold.
