UK inflation drops to 2.8% in huge relief for Rachel Reeves ahead of spring Budget | Personal Finance | Finance

UK inflation eased by more than expected last month, new official figures show, delivering a boost to Chancellor Rachel Reeves ahead of her spring statement. The prices of clothes and shoes fell for the first time in more than three years, the Office for National Statistics (ONS) said.

The rate of Consumer Prices Index (CPI) inflation fell to 2.8% in February from 3% in January. Most analysts had been expecting CPI inflation to come in at 2.9% for February. The latest figures mean the cost of living is still rising for households across the UK – and inflation remains above the Bank of England’s 2% target – but at a much slower rate than in recent years. The bigger-than-forecast inflation drop could provide some relief for Ms Reeves as she prepares to deliver her spring statement on Wednesday afternoon.

She is expected to announce spending cuts for some Government departments and respond to weaker economic growth projections from the Government’s official forecaster.

ONS chief economist Grant Fitzner 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.”

Overall, clothing and footwear prices fell by 0.6% from the 12 months to February, which the ONS said was the first drop since October 2021.

Prices typically rise between January and February, when Christmas sales end and new ranges are launched.

Women’s clothes, accessories like hats and scarves, and children’s clothing all helped bring down the inflation rate last month.

Housing inflation, including rents, also slowed in February, as did admission prices for live music.

On the other hand, alcohol and tobacco prices jumped higher following a tax increase on bottled alcoholic drinks at the beginning of the month.

Responding to the latest data, Chief Secretary to the Treasury Darren Jones said: “Our number one mission is kickstarting growth to raise living standards for working people. That is why we are protecting working people’s payslips from higher taxes.”