UK Inflation Eases but Remains Above Target

UK consumer price inflation eased to 2.8% in February, down from 3% in January, providing temporary relief for Treasury chief Rachel Reeves before her Spring Statement. This drop, primarily driven by a decrease in clothing prices, was more significant than analysts expected, though inflation remains above the Bank of England's 2% target. Reeves is expected to announce spending cuts in response to weaker economic growth forecasts amidst ongoing global market turmoil. The Office for Budget Responsibility projects inflation to average 3.2% in 2025, while the Bank of England maintains interest rates at 4.5% to manage inflation. Future projections suggest inflation could rise again, potentially reaching 4% later in the year due to government price hikes and tax increases. Despite some easing, core inflation remains high, indicating persistent economic challenges for the UK.