UK Inflation Cools in Surprise Boon for Reeves and Rate Cuts

UK inflation unexpectedly cooled, strengthening the case for the Bank of England to cut interest rates again in May and providing a morale boost for Chancellor of the Exchequer Rachel Reeves ahead of a key economic statement Wednesday.

Consumer prices climbed 2.8% in February from a year earlier, slowing from 3% the previous month, the Office for National Statistics said. It was below the 3% economists were expecting on average and in line with the 2.8% predicted by the BOE last month. Clothing prices were the biggest driver of the slowdown, while goods price inflation also eased, the ONS said.