Plane contrails streak across the sky over Regent Street on February 15, 2024 in London, England.
Dan Kitwood | Getty Images
U.K. inflation came in lower than expected at 3.4% year-on-year in February, official figures showed Wednesday, down from 4% in January.
Month-on-month, the headline consumer price index rose by 0.6%, returning to positive territory after a -0.6% reading in January.
Economists polled by Reuters had expected an annual rate of 3.5% for February and a monthly rate of 0.7%, according to LSEG data.
The Office for National Statistics said the largest downward contributions came from food, restaurants and cafes, while the largest upward pressure came from housing and fuel.
The Bank of England expects inflation to fall temporarily back to its 2% target in the second quarter before increasing again later in the year, after hiking interest rates aggressively over the last two years in order to get prices under control.
The closely watched core CPI figure — which excludes volatile food, energy, alcohol and tobacco prices — came in at an annual 4.5%, below a consensus estimate of 4.6% and down from 5.1% in January
