Inflation holds at 3% in February data

Inflation data for February 2026 published by the Office of National Statistics (ONS) has recorded the average annual rate of price rises has held at 3% for the second consecutive month.

While the hold in inflation ends a downward trend in the Consumer Price Index (CPI), the ONS notes that February is typically associated with price rises in many sectors as new Spring product ranges are released. Prices of clothing and footwear, for example, saw a 0.9% increase in price on February 2025. Food and beverage prices saw a 3.3% rise on February 2025, a slight slowdown on January’s data, while alcohol prices fell 1.5%.

Falls in petrol and diesel prices at the pump also helped curb the rate of inflation in February, however, it is now on the rise again. Data collected by the ONS comes from prior to US and Israeli attacks on Iran, which are expected to accelerate inflation due to disruption to international trade in the Strait of Hormuz, a major shipping lane for oil and gas exports from the Middle East.

Elsewhere in Europe, Germany saw a 0.1 percentage fall in inflation to 2%, while the EU average rate of inflation rose slightly from 2% in January, to 2.1%. Across the Channel, French shoppers have seen a quicker rise in prices, albeit from a lower base, with inflation up 0.7 percentage points to 1.1% in February 2026.

Looking ahead, with oil prices rising amid conflict in the Middle East, inflation is expected to increase in March. As a result, hopes from earlier this year that the Bank of England will continue its gradual reduction in interest rates at inflation approaches its 2% target have now largely evaporated. Instead, some analysts are predicted that the Bank’s Monetary Policy Committee will instead vote to increase interest rates later in 2026, with inflation expected to rise above 4%.