UK Inflation Falls to Lowest in 2.5 Years as Food and Energy Costs Ease

UK inflation fell to 3.4% in February, the lowest level in 2.5 years, down from 4% in January. This was faster than economists had predicted.

Food prices were the main driver of the fall as they were almost unchanged compared to large rises a year ago. Restaurant and café prices also rose more slowly.

Services inflation fell to 6.1% in February, suggesting wage pressures on inflation may be starting to ease.

Inflation is forecast to hit the Bank of England's 2% target in April due to base effects and falling energy bills.

Motor fuel inflation remained negative for the 12th straight month but picked up slightly in February, with petrol 2.3p higher per liter and diesel up 3p.