February 2024’s figures were driven by falls in food, clothing and footwear as well as cheaper energy prices. Credit: Shutterstock.

UK consumer prices are down to 3.4% in February from 4% in January following a fall in inflation and now sit at the lowest level in more than two years.

Kris Hamer, director of insight of the British Retail Consortium, welcomed the news and said “After a rocky start to 2024, inflation is once again on its way down. February’s figures were driven by falls in food and clothing and footwear as well as cheaper energy prices. Food inflation fell once again to its lowest rate since January 2022, as retailers continue to deliver the best service to their customers and communities.

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“While [the news on] inflation figures will be good news for consumers, the Government must not be complacent. Significant costs on the horizon may put renewed pressure on overall inflation in the near future; these include a 6.7% rise in business rates, and reforms to the packaging levy and electrical takeback schemes, all in the context of the biggest rise to National Living Wage (NLW) on record. This will limit investment and drive up costs at a time when many families are still facing a higher cost of living,” he added.

Meanwhile, Nick Drewe, retail expert and founder of online discount platform, Wethrift, said though it is encouraging, it doesn’t necessarily mean prices aren’t still rising.

“They are just rising at a slower pace. Families should therefore take the news being circulated today with caution, as there is still a significant way to go to reach the government’s target of 2%. Food inflation is still at 5% – down from 7% – and last month food prices in the UK rose by 0.2%. Prices may have stabilised in comparison to the significant increases we witnessed last year, but they are unfortunately settling at a higher level, with some pointing out that food costs in the UK are almost 30% more expensive than they were in September 2021.

“Let’s not also forget that while this fall in inflation signifies a positive indication for a shift in the economy and the nation’s recovery out of recession, there are still vast numbers of individuals and families struggling with increases to their mortgages and rent, as well as energy costs, council tax, and broadband bills.

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“The question now turns to whether or not the Bank Of England will use the falling inflation rates as justification for a reduction in interest rates, to help give the British people some relief from the crippling toll the past year has taken on their finances.”

Earlier this month the British Retail Consortium issued a call to the government to find ways to stimulate the economy and boost consumer confidence after sales slumped in February with a notable deceleration in clothing sales.