The UK consumer price inflation slowed down in February 2018, following the dropping oil prices and slower food expenditure growth. The country’s inflation slowed down from 3% to 2.7%, which is the lowest level since July 2017.
The fall in prices alleviates the pressure on the Central Bank to raise key interest rates. There is a speculation that the ECB may raise its interest rates in May. The data suggests that pressure on households as a result of accelerating inflation and wage stagnation may be over.
The National Statistical Service will publish the latest payroll details on Wednesday. The economists expect the data to show acceleration of growth to an annual rate of 2.6% in the three months to the end of January.
The situation may be further improved this year, says Bank of England. The BoE expects pay to rise faster than prices. Many of the price rises in early 2017, due to the previous devaluation of the pounds, began to solve the problems in the system.
The hotel prices also dropped, and ferry tickets are rising more slowly than last year. The house price growth remains stable, with a strong increase in much of the country, though London and the northeastern part of the country are lagging behind.
The inflation hit a six-year high of 3.1% in November, and then slowed down to 3%, a level it maintained over the past two months.