UK Inflation Eases in February: A Temporary Reprieve?

In February, UK inflation slowed to 2.8%, offering brief consumer relief. Economists, however, warn of imminent rises due to higher energy costs. Finance Minister Rachel Reeves prepares for her budget speech amidst expectations of further inflation driven by energy prices and regulatory tariffs.

The latest data from the Office for National Statistics revealed that British inflation grew by 2.8% annually in February, down from January's 3% figure. Consumers welcomed this unexpected slowdown, which eased inflation fears prior to Finance Minister Rachel Reeves' budget announcement scheduled for Wednesday.

Despite the figures, economists remain cautious. Suren Thiru, Economics Director at ICAEW, highlighted imminent price hikes in energy bills and national insurance as key drivers of future inflation spikes, with predictions pointing to inflation nearing 4% soon.

With the Bank of England's inflation target at 2%, Luke Bartholomew of Aberdeen suggested that the slowdown might encourage interest rate cuts by May. However, energy costs and regulatory tariffs remain significant challenges, potentially pushing inflation further in the coming months.

(With inputs from agencies.)