Unexpected fall in inflation as Chancellor prepares for today’s Spring Statement

The rate of inflation fell to 2.8% in the the 12 months to February, in a welcome boost to the Government ahead of this afternoon’s Spring Statement.

The figure, down from 3% in January, was driven by a drop in the price of women’s clothes, according to the Office for National Statistics (ONS).

Grant Fitzner, chief economist at the ONS, said: “Inflation eased in February. Clothing prices, particularly for women’s clothes, was the biggest driver for this month’s fall.

“This was only partially offset by small increases, for example, from alcoholic drinks.”

Professor Joe Nellis, economic adviser at MHA, the accountancy and advisory firm, said: “Inflation coming in slightly lower than expected at 2.8% for February is a welcome surprise for the Government ahead of the Spring Statement, yet it is unlikely to undo the shift towards caution in the rate-cutting strategy of the Bank of England that has taken place in recent months.

“The drop in year-on-year inflation is also slightly misleading, due to the ONS calculating this value through a direct comparison with inflation in February 2024. With last February seeing a 0.6% monthly rise in inflation — the joint-highest jump since May 2023 — this calms the year-on-year figure, despite inflationary pressures remaining strong.

“A month-on-month inflation figure of 0.4% this February shows that inflation is not slowing down.”