Consumer price inflation was 0.4% in February, down from 0.7% in January and a bit lower than the City expected.
Some economists and Chancellor Rishi Sunak have lately worried that a sharp rise in inflation would impact government finances by increasing the cost of servicing the UK’s £2.1 trillion debt pile.
Today’s figures should offer some reassurance that this isn’t an immediate problem. Oil has risen lately, a sign that markets expect global economies to sharply grow once lockdown ends.
ONS Deputy National Statistician for Economic Statistics Jonathan Athow said:
“A fall in clothing prices helped to ease inflation in February, traditionally a month where we would see these prices rise, but the impact of the pandemic has disrupted standard seasonal patterns. Elsewhere there were falls in the price of second-hand cars.
”However, prices at the pump rose this month, compared with a fall this time last year.”