UK inflation slowed to 2.8% in February but fresh climb expected

British inflation slowed to an annual rate of 2.8% in February from 3.0% in January, bringing some temporary relief for consumers ahead of a likely resurgence in price growth.

Economists polled by Reuters had pointed to a reading of 2.9% in February, compared with the Bank of England's forecast of 2.8% which was published last month.

The central bank expects consumer price inflation to peak at 3.75% in the third quarter of this year - almost double its 2% target - driven mostly by higher energy costs and regulated tariffs for household utility bills and bus fares.


Sterling was down by around a fifth of a cent at 0710 GMT.

The Office for National Statistics said services inflation - closely watched by the BoE - held at an annual rate of 5.0%, against expectations for a fall to 4.9%. The central bank had expected it would rise to 5.1% in Wednesday's data.