Inflation down to 2.7%
UK inflation fell to 2.7% in February, down from 3% in January, as measured by the Consumer Prices Index.
Average petrol prices fell by 0.2 pence per litre between January and February, to 120.8 pence per litre in February.
Food and non-alcoholic beverages prices rose by 0.1% between January and February this year compared with a rise of 0.8% a year ago.
The Office for National Statistics says the fall suggests the impact of the Brexit vote is wearing off, with
transport and food having the biggest downward push on inflation.
Falling prices for accommodation services also had a mitigating effect.
Rising prices for footwear produced the largest, partially offsetting, upward contribution.
In recent months, import costs had been pushed by drop in sterling after the EU referendum in June 2016.
Kevin Doran, chief investment officer at Manchester-based investment platform AJ Bell, said: “While today’s numbers show a small moderation in price rises, they don’t detract from the fact that interest rates and yields on bonds continue to track significantly below the pace of inflation.
“It is clear that the war on savers that began in March, 2009 with ultra-low interest rates and a monetary experiment in the form of Quantitative Easing, continues to offer up casualties.
“Savers who have held their money in a UK bank account since then have seen their savings grow at a paltry 4% in total, which is dwarfed by the 30% increase in inflation over the same period.
“Inflation is eating away the value of savers’ money and this should act as a spur to anyone who has large amounts of savings held in low or zero-interest paying bank accounts to consider whether taking some investment risk could help at least preserve the spending power of their savings.
“The drop in inflation also creates some breathing space for the Bank of England’s Monetary Policy Committee when it comes to increasing interest rates. However, solid economic data and the risks around Sterling depreciating further, especially as we move closer to the realities of implementing Brexit, are likely to see Mark Carney and the fellow members remain poised to raise rates again in the near future.
“Even if interest rates do start to rise, any progress is likely to be slow and there is a long way to go before savers will see returns that even break even with inflation.”