UK inflation hits lowest rate since 2021 at 3.4%

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The UK’s inflation rate fell sharply in February, bolstering arguments for the Bank of England to start cutting interest rates this year as it makes headway in bringing price growth under control.

The consumer prices index rose by 3.4 per cent last month compared with a 4 per cent year-on-year rate in January, according to the Office for National Statistics. That left headline inflation lower than the 3.5 per cent rate forecast in a Reuters poll of economists.

Core inflation, which excludes food and energy, fell to 4.5 per cent from 5.1 per cent previously, also slightly lower than the 4.6 per cent reading predicted by economists.

Sterling nudged lower after the data. The pound was down 0.06 per cent against the dollar at 1.2711.

This is a developing story.