Inflation falls to seven-month low, says ONS

Inflation fell to 2.7% last month from 3% in January, the Office for National Statistics said.

Lower petrol prices and cheaper hotel rooms were among the reasons for the decline, which was slightly bigger than expected.

There was also a more muted rise in the cost of food and drink than in the same period of 2017, when a shortage of vegetables from Europe such as lettuce and courgettes affected supply.

That helped take the Consumer Price Index (CPI) measure of inflation to its lowest level since July last year. Economists had been expecting a reading of 2.8%.

The figures come two days before the Bank of England's next interest rate decision but are unlikely to change expectations about the timing of the next hike - with many experts pencilling in May for a rate rise but others urging the Bank to stay its hand for now.

Inflation has been steadily climbing in the aftermath of the Brexit vote in June 2016 - whose result led to a collapse in the pound, driving import prices higher and feeding through the cost of goods in shops.

But that effect is now tapering out while the pound has recovered much of its lost ground.

Paul Hollingsworth, senior UK economist at Capital Economics, said the fall in inflation "confirms that we have now reached a turning point" but that this did not diminish the case for a rate hike in May.

Tej Parikh, senior economist at the Institute of Directors, said: "Businesses and households will be relieved that the peak impact of sterling's depreciation on inflation now appears to have largely washed through.

"This is certainly a boon for consumers who have been wedged between high food prices on the one hand and subdued earnings on the other for an extended period."

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