'Turning point' as inflation falls to seven-month low

Respite for consumers as inflation expected to ease back to 2.8%

UK Inflation Slows in Feb as Brexit Hit to Pound Fades

The U.K.'s annual inflation dropped to 2.7 percent in February, down from 3 percent in January, the Office for National Statistics reported today.

The Consumer Prices Index (CPI) measure of inflation is expected to have fallen to 2.8% last month when official figures are released on Tuesday. Bank of England Governor Mark Carney said confirmation of a transition deal, which should give some certainty to businesses, could make the bank reassess its outlook for the economy.

Transport prices dragged on the cost of living in February, securing a smaller month-on-month rise of 0.5% in contrast to a 1.2% jump a year ago.

That was down on January's rate of 3 percent and takes inflation to its lowest level since July.

The British economy has slowed sharply since the country voted to leave the European Union in June 2016 as businesses reined in investment and consumer spending eased after inflation spiked following the pound's fall, raising the cost of imported goods like energy and food.

The figures come two days before the Bank of England's next interest rate decision and are unlikely to change expectations about the timing of the next hike - with many experts pencilling in May for the next rate rise.

The fall in food price growth was partly down to a shortage of salad and vegetables previous year when bad weather hit crops in southern Mediterranean countries, the ONS said.

Retail price inflation was also lower than expected at 3.6%, against a rise of 4% in January year-on-year. It is widely expected to say on Thursday that it will keep rates on hold for now, and stick with a plan to raise borrowing costs only gradually. It expects wages to grow more quickly than inflation. Despite record low mortgage rates remaining largely unchanged since the rate rise, and November's stamp duty reforms said to have already benefited 60,000 first time buyers, owning a property remains out of reach for many aspiring homeowners looking to get their foot on the housing ladder.

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