UK inflation falls to 2.8% in February, lower than previous months, impacting economic growth
From Morningstar: 2025-03-26 06:07:00
UK inflation held steady in February, rising by 2.8% in the 12 months to February 2025, slightly lower than January’s 3.0%. Falling clothing and footwear costs contributed to this. Core CPI, excluding volatile items, was up 3.5%, down from January’s 3.7%. Inflation remains above the Bank of England’s 2% target.
The UK economy shrunk by 0.1% in January, contrary to expectations of a 0.1% rise. Chancellor Rachel Reeves will address the economy in the Spring Statement today, following cuts to government budgets. Inflation coming in lower than expected for February could impact economic growth and Bank of England decisions on interest rates.
Despite inflation rising, UK economy saw falling figures in January. Bank of England projects inflation to rise above 3% this year, but then decrease in 2026. CPIH, including housing costs, rose 3.7%, while core CPIH increased by 4.4%. April may bring rising bills as companies adjust prices and the Ofgem energy cap rises.
Bank of England maintains interest rates at 4.5%, with speculation on further cuts. Interest rate swaps show a 76.8% chance of a cut in May, down from a previous 55.6% chance in August. Uncertainty remains due to geopolitical factors like tariffs and US actions. Investors await the Bank of England’s next update on rates in May. 1. The unemployment rate in the United States has dropped to 4.8% in the month of September, marking a decrease from 5.2% in August. This is the lowest rate since the start of the pandemic, with 194,000 jobs added last month.
2. The global stock market saw a significant increase after the announcement of positive job growth in the U.S. The Dow Jones Industrial Average rose by 1.5%, while the S&P 500 and Nasdaq Composite also experienced gains.
3. In the tech industry, Apple announced a new iPhone model with improved camera features and faster processing speed. The company reported a 20% increase in iPhone sales in the last quarter, exceeding expectations and boosting their stock price.
4. In the healthcare sector, Pfizer announced positive results from their COVID-19 vaccine booster shot trials. The study showed a significant increase in antibody response after the third dose, providing hope for continued protection against the virus.
5. Retail giant Amazon reported a 12% increase in sales in the third quarter, driven by strong demand for online shopping and cloud computing services. The company also announced plans to hire 150,000 seasonal workers for the upcoming holiday season.
Read more at Morningstar: UK Inflation Falls to 2.8% in February