British Inflation Eases But Challenges Loom

In February, the UK's inflation rate dropped to 2.8% from January's 3.0%, temporarily alleviating consumer concerns. Economists anticipated a 2.9% inflation rate, close to the Bank of England's forecast of 2.8%. The BoE projects inflation peaking at 3.75% due to high energy costs.

Inflation in the United Kingdom eased slightly in February, dropping to an annual rate of 2.8% from January's 3.0%, according to the latest figures. This decline offers consumers temporary relief before anticipated future price increases.

Economists surveyed by Reuters expected a figure closer to 2.9%, slightly higher than the Bank of England's prediction of 2.8%, issued last month. The central bank foresees consumer price inflation reaching 3.75% during the year's third quarter, propelled by escalating energy expenses and regulated costs for household utilities.

At 0710 GMT, the British pound fell approximately a fifth of a cent. The Office for National Statistics reported that services inflation, a key measure for the BoE, remained steady at 5.0%, contrary to expectations of a reduction to 4.9%, with the central bank projecting a slight increase to 5.1% in the forthcoming data.

(With inputs from agencies.)