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| Version 0 | Version 1 |
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| UK inflation rate starts to fall | UK inflation rate starts to fall |
| (10 minutes later) | |
| The UK inflation rate fell to 3% in February from 3.5% the month before, official figures have shown. | The UK inflation rate fell to 3% in February from 3.5% the month before, official figures have shown. |
| The drop in the Consumer Prices Index (CPI) inflation rate was greater than the sharp drop analysts had expected. | The drop in the Consumer Prices Index (CPI) inflation rate was greater than the sharp drop analysts had expected. |
| Retail Prices Index (RPI) inflation, which includes housing costs, remained unchanged at 3.7% in February. | Retail Prices Index (RPI) inflation, which includes housing costs, remained unchanged at 3.7% in February. |
| The CPI inflation rate is the measure targeted by Bank of England interest-rate setters, while RPI is often used as a benchmark in wage negotiations. | The CPI inflation rate is the measure targeted by Bank of England interest-rate setters, while RPI is often used as a benchmark in wage negotiations. |
| Government target | Government target |
| The fall in CPI to 3% was slightly bigger than a drop to 3.1% expected by the economic analysts. | The fall in CPI to 3% was slightly bigger than a drop to 3.1% expected by the economic analysts. |
| INFLATION UPS AND DOWNS Price up FootwearWomen's clothing Price down ToysComputer gamesGas | INFLATION UPS AND DOWNS Price up FootwearWomen's clothing Price down ToysComputer gamesGas |
| A letter from the bank's governor is required if inflation is more than one percentage point above or below the government's 2% target. | A letter from the bank's governor is required if inflation is more than one percentage point above or below the government's 2% target. |
| The rise in the CPI inflation figure to 3.5% in January had been put down to VAT returning to 17.5%. | The rise in the CPI inflation figure to 3.5% in January had been put down to VAT returning to 17.5%. |
| There will now be hopes that that inflation has peaked, and will drop back below the bank's 2% target by the end of the year. | There will now be hopes that that inflation has peaked, and will drop back below the bank's 2% target by the end of the year. |
| "It's the second month in a row that it's undershot the consensus," said Peter Dixon, economist at Commerzbank. | |
| "It tells us that we can be pretty confident that the Bank of England's view that inflation will fall sharply this year is on track." | |
| Retailer restraint | |
| The Office for National Statistics said that in February recreation and culture made the largest contribution to the fall in the annual CPI rate, followed by housing and household services. | The Office for National Statistics said that in February recreation and culture made the largest contribution to the fall in the annual CPI rate, followed by housing and household services. |
| Clothing and footwear added most to the annual rate. | Clothing and footwear added most to the annual rate. |
| "February's moderation in consumer price inflation was primarily due to utility price cuts and the fact that food prices rose much less than a year ago," said Howard Archer, economist at IHS Global Insight. | |
| "It is also likely that many retailers put prices up less this February than a year ago following the ending of the post-Christmas clearance sales, as there was less sharp and extensive discounting in the sales in the first place." | |
| Meanwhile core inflation, which excludes food and energy prices, fell to 2.9% in February from 3.1%. |