UK inflation eases to 2.8% in February

(Sharecast News) - UK inflation eased a little more than expected in February as clothing prices fell, according to figures released on Wednesday by the Office for National Statistics. Consumer price inflation eased to 2.8% from 3% in January. Economists were expecting a smaller decline to 2.9%.

ONS chief economist Grant Fitzner said: "Clothing prices, particularly for women's clothing, was the biggest driver of this month's fall.

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

Paul Dales, chief UK economist at Capital Economics, said the dip in CPI inflation "is a bit of a red herring" as inflation will probably be back above 3.0% in April once energy bills increase and around 3.5% by September.

"That and the risk of spillovers into wages will probably mean the Bank of England will press pause on interest rate cuts at some point in the coming months," he said.

"If that were to prompt a further rise in market rate expectations, today may not be the only time this year the Chancellor has to tighten fiscal policy to compensate for higher borrowing costs."