Consumer price inflation in the UK dropped 0.3% in the month of February, the lowest data point since July 2017. Financial experts point to lower petrol prices combined with a slower rise in food costs as the reason for the drop. Heading into the month, price inflation had sat at 3%, but the month ended at 2.7%.
Diesel costs fell 0.1p per liter, while overall petrol prices fell by 0.2p per liter. The cost of food only increased 0.1% between the months of January and February. This small increase contrasted to a total rise of 0.8% for the year 2017. This smaller rise was to be expected since last year’s big increase was largely attributed to a shortage of vegetables due to poor weather in the southern Mediterranean negatively affecting export prices.
Consumers now look to the Bank of England to determine if interest rates will remain steady or if the Bank will continue with its anticipated plan to raise these rates at its May meeting. The Bank is hopeful that the economic future is bright for the country, as it has previously stated that it expects wage increases to outpace inflation in the coming year. Financial employment experts are confirming this optimism as data points to a wage increase of 2.6% over the first three months of 2018. The official pay growth data will be released on Wednesday by the Office for National Statistics (ONS).