UK inflation unexpectedly fell to 2.8 per cent in February, in a boost to chancellor Rachel Reeves as she prepares to deliver a high-stakes Spring Statement.
The annual increase in consumer prices, reported by the Office for National Statistics on Wednesday, was below the 2.9 per cent forecast by economists polled by Reuters and 3 per cent recorded in January.
The figure comes as Reeves is set to outline more than £10bn of spending cuts in an attempt to repair a hole in the public finances caused by anaemic growth and higher borrowing costs.
Persistent price pressures have prompted the Bank of England to take a “gradual” approach to cutting interest rates despite lacklustre growth. Last week it held rates at 4.5 per cent.
