In February, UK consumer price inflation declined, reaching its lowest since 2021 as reported by the Office for National Statistics (ONS).
The consumer price index (CPI) showed an annual increase of 3.4 percent, which is lower compared to the 4.0 percent spike in January. This inflation rate was the lowest recorded since September 2021, contrary to anticipated that we could see a 3.5 percent increase.
In terms of monthly increments, consumer prices exhibited a 0.6 percent increase, thus balancing the 0.6 percent drop in January.
When considering core inflation, which negates the impact of energy, food, alcohol, and tobacco, a decline was noted from 5.1 percent to 4.5 percent compared to the previous month, although it was predicted to be 4.6 percent. The annual rate of the CPI for goods dropped to 1.1 percent from 1.8 percent, whereas the annual CPI rate for services reduced to 6.1 percent from 6.5 percent. The ONS attributed these falls to significant decreases in food and non-alcoholic beverages, and hospitality sectors, despite a notable increase in housing and household services.
Additionally, the ONS data demonstrated a 0.4 percent yearly increase in output prices, as opposed to a 0.3 percent drop in January. Prices were predicted to decline by 0.1 percent.
Simultaneously, input prices fell 2.7 percent in February, aligning with predictions, following a marginally higher 2.8 percent drop the month before. On a monthly basis, February saw producer input prices decrease by 0.4 percent while output prices increased by 0.3 percent.
