UK inflation falls to 2.8%
Newsflash: UK inflation has fallen again to 2.8%, in a lift to Rachel Reeves a couple of hours earlier than she delivers her spring assertion.
The Workplace for Nationwide Statistics stated annual inflation as measured by the patron costs index cooled final month, dropping from 3% in January.
That barely lowers the price of residing strain on households, but in addition means costs are nonetheless rising sooner than the Financial institution of England’s 2% goal.
On a month-to-month foundation, CPI rose by 0.4% in February 2025, in contrast with an increase of 0.6% in February 2024.
The biggest downward contribution got here from clothes, the ONS studies.
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Up to date at 03.04 EDT
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ONS chief economist Grant Fitzner studies that alcoholic drinks costs have risen:
“Inflation eased in February. Clothes costs, notably for girls’s garments, was the largest driver for this month’s fall.
“This was solely partially offset by small will increase, for instance, from alcoholic drinks.”
At this time’s UK inflation report reveals that costs of alcohol and tobacco rose by 5.7% within the 12 months to February, up from 4.9% in January.
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First annual fall in clothes costs since 2021
Cheaper clothes pulled the UK’s inflation fee down final month.
General costs for clothes and footwear fell by 0.6% within the 12 months to February 2025, in contrast with an increase of 1.8% within the 12 months to January
February’s determine was the primary damaging annual fee since October 2021, as a result of extra discounting by retailers as they tried to shift inventory.
The inflation report explains:
The easing within the annual fee was primarily the results of a big downward impact from clothes for girls, with small downward results coming from a spread of ladies’s clothes objects.
There have been extra small downward results from youngsters’s clothes, and different clothes and clothes equipment, equivalent to hats and ladies’s scarves.
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Up to date at 03.08 EDT
UK inflation falls to 2.8%
Newsflash: UK inflation has fallen again to 2.8%, in a lift to Rachel Reeves a couple of hours earlier than she delivers her spring assertion.
The Workplace for Nationwide Statistics stated annual inflation as measured by the patron costs index cooled final month, dropping from 3% in January.
That barely lowers the price of residing strain on households, but in addition means costs are nonetheless rising sooner than the Financial institution of England’s 2% goal.
On a month-to-month foundation, CPI rose by 0.4% in February 2025, in contrast with an increase of 0.6% in February 2024.
The biggest downward contribution got here from clothes, the ONS studies.
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Up to date at 03.04 EDT
The Prospect union are urging the federal government to ensure the brand new funds for defence are spent within the UK, relatively than on abroad weapons makers.
Mike Clancy, Common Secretary of Prospect, says:
“The necessity to put money into defence turns into extra apparent by the day, and this new cash is a vital down fee on this nationwide precedence.
“New funding within the sector should go in direction of creating good, well-paid jobs within the UK’s world main defence trade and never sending work overseas as has occurred too usually up to now.
“Authorities should additionally go additional in investing in expert workers within the MOD in areas like procurement, to ensure we have now the experience on the coronary heart of presidency to make sure that extra cash is spent effectively within the nationwide curiosity.”
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You may rise up to hurry on the tough financial image dealing with the chancellor right here:
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Reeves anticipated to announce additional welfare cuts in spring assertion
Rachel Reeves’s spring assertion plans have suffered a last-minute shock.
Britain’s fiscal watchdog, the Workplace for Funds Duty, has rejected the federal government’s estimate of financial savings from the adjustments introduced final week, which can pressure the chancellor to make extra welfare cuts right this moment to maintain inside her fiscal guidelines.
Ultimate estimates from the OBR urged the adjustments introduced by Liz Kendall, the work and pensions secretary, which included tightening the factors for the non-public independence fee (Pip), wouldn’t save the £5bn wanted to maintain inside Reeves’s self-imposed borrowing limits.
The chancellor is anticipated to announce an extra £500m in advantages cuts to make up a part of the £1.6bn shortfall, first reported by the Occasions – with the remainder of the hole stuffed by spending cuts elsewhere.
Right here’s the total story:
In line with Sky Information, Reeves is now anticipated to announce that common credit score (UC) incapacity advantages for brand new claimants, which had been halved underneath the unique plan, can even be frozen till 2030 relatively than rising according to inflation.
There can even be a small discount within the fundamental fee of UC in 2029, with the brand new measures anticipated to lift £500m, they add.
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Introduction: UK inflation report due forward of spring assertion
Good morning, and welcome to our rolling protection of enterprise, the monetary markets and the world financial system.
It’s a purple letter day within the Metropolis of London, as traders await the most recent UK inflation report, after which an replace on the nation’s funds.
On inflation, due at 7am, economists count on a small slowdown within the rising price of residing. The Shopper Costs Index is forecast to have risen by 2.9% within the 12 months to February, down barely on January’s 3%.
That may nonetheless present costs rising sooner than the Financial institution of England’s 2% goal however would a minimum of be a transfer in the fitting path for strugging households.
Nevertheless, any aid could also be short-lived, with many payments set to rise in April. The BoE predicts inflation will hit 3.75% this autumn.
Economist Robert Wooden and Elliott Jordan-Doak of Pantheon Macroeconomics predict:
“February ought to be the calm earlier than the storm of annual value resets, as Authorities-set value hikes and tax rises drive up headline CPI inflation to three.5% in April.
A drop in inflation can be welcome information for Chancellor Rachel Reeves, as she prepares to ship her spring assertion.
This was initially meant to be a low-key replace, however Reeves is now anticipated to announce spending cuts for some Authorities departments, and cuts to illness and incapacity advantages which will likely be very unpopular with Labour MPs.
Reeves is in a bind as a result of authorities borrowing is operating forward of estimates, whereas progress has been disappointing.
The Workplace for Funds Duty is anticipated to decrease its progress forecasts, and will halve its progress projection for 2025 from 2% to close 1%.
The rise in UK authorities borrowing prices since final October’s price range has additionally eaten into the chancellor’s restricted headroom to maintain inside her debt limits.
Reeves is anticipated to vow “safety and nationwide renewal”, alongside acquainted pledges to kickstart financial progress and defend working folks. She’ll additionally announce an additional £2.2bn funding improve for defence from April, to maintain the nation protected.
Reeves is anticipated to say she is pleased with what has been delivered within the 9 months because the basic election:
“Restoring stability to our public funds; giving the Financial institution of England the inspiration to chop rates of interest 3 times because the Common Election; rebuilding our public providers with report funding in our NHS and bringing down ready lists for five months in a row; and rising the Nationwide Residing Wage to provide 3 million folks a pay rise from subsequent week.
The agenda
7am GMT UK inflation report for February
9.30am GMT: UK home costs and rents report
12.30pm GMT: Rachel Reeves delivers the spring assertion
1pm GMT (approx): Workplace for Funds Duty publishes its newest financial anad fiscal outlook
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Up to date at 02.38 EDT
