UK inflation fell back by more than expected last month to the lowest level in more than two years as the growth in food prices eased for cash-strapped households, official figures have shown.

The Office for National Statistics (ONS) said that Consumer Prices Index inflation stood at 3.4% in February – down from 4% in January and the lowest level since September 2021.

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Most economists had been expecting inflation at 3.5% last month.

Inflation is now closer towards the Bank of England’s 2% target and comes ahead of the latest interest rate decision on Thursday.

Policymakers are widely expected to keep rates on hold at 5.25%, but the steep fall in the CPI is likely to reinforce expectations that the Bank is moving closer to cutting rates later this year.

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Grant Fitzner, chief economist at the ONS, said: “Inflation eased in February to its lowest rate for nearly two-and-a-half years.

“Food prices were the main driver of the fall, with prices almost unchanged this year compared with a large rise last year, while restaurant and café price rises also slowed.

“These falls were only partially offset by price rises at the pump and a further increase in rental costs.”