Inflation has fallen to a two-year low

image source, Good pictures

Inflation eased to 3.4% in February, down from 4% in January and close to the bank's target of 2%.

The decline means the cost of living has been rising at its slowest pace since September 2021, at 3.1%.

Inflation, the rate at which prices rise over time, has been slowing since reaching 11.1% in October 2022, its highest rate in 40 years.

The Office for National Statistics (ONS) said food price inflation was behind the decline.

However, prices have not come down yet, they are rising faster than before.

Most economists had predicted a fall and said they expected the Bank of England to cut interest rates further later this year.

The figure comes ahead of its latest interest rate decision on Thursday, which is expected to leave rates at 5.25%.

While the fall in inflation was welcomed by the government, it follows official data last month that confirmed the UK slipped into recession at the end of last year.

The ONS's chief economist, Grant Fitzner, told the BBC's Today program that one of the reasons for the larger-than-expected fall in last month's figures was that food price inflation fell “slightly” from 6.9% to 5%.

“This is 11 consecutive monthly declines… In fact we have not seen much change in food prices for the last nine months, they have been almost flat,” he said.

“But the general trend continues to be lower,” Mr Fitzner said.

Although the ONS did not reflect the fall in energy prices in its calculations, economists said the Bank of England and the Office for Budget Responsibility predicted a further fall in inflation.

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