Inflation ‘unexpectedly’ falls to 2.8% in February

Inflation unexpectedly fell to 2.8% in February in much welcome news for the chancellor ahead of the Spring Statement later today (26 March).

A fall in the prices of clothing had the biggest impact on inflation in February, according to the latest figures from the Office for National Statistics (ONS).

The slowing in the rate reflected downward contributions from four divisions and upward contributions from five divisions.

Overall prices for clothing and footwear fell by 0.6% in the 12 months to February 2025, compared with a rise of 1.8% in the 12 months to January. The February figure was the first negative annual rate since October 2021.

This was mainly the result of a large downward effect from garments for women, with small downward effects coming from a range of women’s clothing items. There were additional small downward effects from children’s clothing, and other clothing and clothing accessories, such as hats and women’s scarves.

There were no large, offsetting upward contributions. Alcohol and tobacco prices rose by 5.7% in the 12 months to February 2025, up from 4.9% previously. Duty on non-draught alcohol also increased from 1 February 2025 as announced in the Autumn Budget 2024. There was also a small upward contribution from communication, where the price of mobile phone applications (apps) rose this year but fell a year ago.

ONS chief economist Grant Fitzner said: “Inflation eased in February. Clothing prices, particularly for women’s clothes, were the biggest driver for this month’s fall. This was only partially offset by small increases, for example, from alcoholic drinks.”