UK inflation drops to 2.8% in February amid lower clothing, household costs

The United Kingdom’s inflation rate edged down to 2.8% in February 2025, a slight decline from 3.0% recorded in January, as falling clothing and household prices contributed to easing cost pressures, according to data released by the Office for National Statistics (ONS) on Wednesday.

The latest figures mark a continued downward trend in inflation, reinforcing expectations of economic stabilization as the Bank of England closely monitors price movements for potential interest rate adjustments.

In its report, the ONS highlighted that the biggest contributors to the slowdown in price growth were the clothing and footwear sector, housing and household services, as well as recreation and culture.

“The Consumer Prices Index including owner occupiers’ housing costs (CPIH) rose by 3.7% in the 12 months to February 2025, down from 3.9% in January,” the ONS stated.

It added, “On a monthly basis, CPIH rose by 0.4% in February 2025, compared with a rise of 0.6% in February 2024.”

Similarly, the Consumer Prices Index (CPI), which excludes housing costs, rose by 2.8% year-on-year in February, down from 3.0% in January, marking the lowest level in nearly two years.

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Grant Fitzner, Chief Economist at the ONS, noted that a significant reduction in clothing prices—particularly for women’s apparel—played a major role in slowing overall inflation.

“Clothing prices, especially in women’s fashion, were the main driver of this decline. However, the impact was only partially offset by small increases, such as those in alcoholic drinks,” Fitzner explained.

Despite the overall decline in inflation, food and non-alcoholic beverage prices remained unchanged at 3.3% year-on-year, reflecting persistent cost pressures in essential commodities. Meanwhile, alcohol and tobacco prices saw an increase, rising by 5.7% in February compared to 4.9% in January.

The easing inflation rate is likely to influence policy decisions at the Bank of England, which has maintained a cautious approach toward interest rate cuts amid lingering inflationary risks. With inflation now approaching the central bank’s 2% target, policymakers may consider reducing borrowing costs later in the year to stimulate economic growth.

As UK households continue to grapple with cost-of-living challenges, the latest inflation figures provide some relief, suggesting that price pressures are gradually softening. However, with wage growth and global economic uncertainties still in play, analysts caution that the path to sustained price stability remains uncertain.