UK consumer price inflation weakened to the lowest in nearly two-and-a-half years in February on easing food price inflation, official data showed ahead of the Bank of England\'s monetary policy announcement this week.
The consumer price index registered an annual growth of 3.4 percent, slower than the 4.0 percent rise in January, the Office for National Statistics reported Wednesday. The rate was the lowest since September 2021.
Core inflation that excludes energy, food, alcohol and tobacco weakened to 4.5 percent from 5.1 percent in the previous month. The rate was seen at 4.6 percent.
Capital Economics\' economist Paul Dales said the bank may have to start cutting rates in the summer and lower it to 3.00 percent in 2025 rather than to 4.00 percent as investors expect.
Further, the economist said inflation appears no more persistent than the BoE expected and it is moving in line with the path that the central bank has hinted would warrant interest rate cuts.
The BoE is set to announce its monetary policy decision on March 21. The UK central bank is expected to keep the benchmark rate unchanged at a 15-year high of 5.25 percent.
Chancellor Jeremy Hunt said falling inflation sets the scene for better economic conditions.
On a monthly basis, consumer prices gained 0.6 percent, offsetting January\'s 0.6 percent fall.
The CPI goods inflation rate slowed to 1.1 percent from 1.8 percent, while the CPI services inflation rate eased to 6.1 percent from 6.5 percent.
The ONS said large downward effects from food and non-alcoholic beverages, and restaurants and hotels were partially offset by a large upward effect from housing and household services.
ONS data showed that output prices grew 0.4 percent on a yearly basis, in contrast to the 0.3 percent fall in January. Prices were expected to ease 0.1 percent.
At the same time, input prices dropped 2.7 percent in February, as expected, following a revised 2.8 percent decrease a month ago.
Month-on-month, producer input prices fell 0.4 percent after falling 0.1 percent and output prices gained 0.3 percent in February.