LONDON (AFP) – Britain’s annual inflation rate fell more than expected in February, official data showed yesterday, fuelling speculation that the Bank of England (BoE) will start cutting interest rates in the coming months.
Inflation reached 3.4 per cent last month – the lowest level since September 2021 – after hitting four per cent in January, according to the Office for National Statistics.
The consensus had been for consumer prices to rise by 3.5 per cent in February, according to the BoE and other economists.
The drop may give a boost to embattled Prime Minister Rishi Sunak and his Conservative party as they face the prospect of losing a general election later this year amid discontent over the country’s cost-of-living crisis.
But with inflation remaining well above the BoE’s two-per cent target, the central bank is widely expected to keep its main interest rate on hold in an announcement due Thursday.
This follows a latest regular monetary policy meeting and also an interest-rate announcement Wednesday from the United States (US) Federal Reserve.
Economists are forecasting the Fed and European Central Bank will begin cutting rates from June – having massively hiked borrowing costs as inflation began soaring in 2021.
