Inflation’s Big Pay‑Off: 3.4% in February – Lowest Since 2021!
In February, the official Consumer Prices Index (CPI) dropped to 3.4%, pulling down from 4% in January. That’s a neat little leap back toward the Bank of England’s 2% target and the lowest inflation since September 2021.
Why This Matters
- Lower inflation opens the window for the BoE to consider cutting interest rates, which could trickle down to lower mortgage rates and lighten the monthly bill for millions.
- The drop hints that the “decisive” measures taken by the Government over the past year are finally starting to pay off.
Jeremy Hunt’s Take
The Chancellor’s voice was as upbeat as a sunrise: “Inflation has not just fallen decisively but is forecast to hit the 2% target within months.” He added that this progress provides an opening to boost economic growth, raise pay for work, and even reduce national insurance.
In a broadcast, Hunt warned, “It’s far too early to know whether we’ll have another fiscal event before the election, but the decisions we’ve made are paying off.”
Economist Insights
ING’s James Smith weighed in: “A 12% drop in household energy bills in just under two weeks should bring headline inflation below 2% in either April or May.” He added that the trend is likely to stay below the BoE’s target throughout 2024, especially if the regulator further trims the energy price cap in July.
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