According to official data, the UK’s inflation rate fell to 3.4% in February from 4% in January. This is seen as a gradual improvement as the country inches closer to the Bank’s target of 2%. This plummet in inflation witnessed its slowest growth rate since September 2021, when it was at 3.1%. The significant decrease is majorly attributed to plummeting food prices, according to data provided by the Office for National Statistics (ONS).
Inflation is defined as the rate at which prices rise over time, and has been on a gradual decline since October 2022 when it hit its peak 40-year high of 11.1%. It is pertinent to note that food price inflation was the main reason for the current fall in inflation. Though things are looking up, prices are merely rising less fast compared to the previous climbs.
Single-digit inflation rates, according to most economists, mean that the Bank of England may value a cut to interest rates later in the year. Ahead of its latest interest rate decision on Thursday, the rates are expected to remain at 5.25 %. These declining inflation rates are greatly freeing up the government, concerning policies and regulations.
Grant Fitzner, the chief economist at the ONS, said that one of the reasons for last month’s drop in figures was the sharp fall in food price inflation, which has decreased “quite a bit” from 6.9% to 5%. “These falls were only partially offset by price rises at the pump and a further increase in rental costs,” he confirmed. Although the ONS did not factor energy prices into its calculations, the Bank of England and Office for Budget Responsibility predict continued inflation declines
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