Rate of inflation remains unchanged

The UK’s inflation rate as measured by the Consumer Price Index (CPI) remained unchanged at a level of 0.3% during February, the Office for National Statistics (ONS) has revealed.

The CPI rate was expected to rise to 0.4% this February.

Transport costs fell, but food prices experienced a rise, according to ONS data. Inflation is expected to remain below 1% this year.

The Bank of England’s target is for annual inflation to rise no higher than 2%.

The Bank has stated that inflation levels must rise before it will consider raising interest rates. At a meeting earlier in the year, the Monetary Policy Committee (MPC) voted to keep these rates at 0.5% - a record-low figure at which interest rates have now remained for the last seven years.

Additionally, core inflation also remained at its rate of 1.2%, the ONS reported. This type of inflation excludes energy, food, alcohol and tobacco costs.

Within its fiscal outlook published alongside Chancellor George Osborne’s Budget, the Office for Budget Responsibility (OBR) downgraded UK economic growth for 2016 to a level of 2.0% from an anticipated rate of 2.4%.

Growth for the next two years has also been reduced by 0.3 percentage points.