Commenting on data from the Office of National Statistics, which saw the headline rate of CPI inflation fall from 4.0% in January 2024 to 3.4% in February 2024, Dr. Roger Barker, Director of Policy at the Institute of Directors, said:

“Although a sharp decline in February’s inflation figures was largely anticipated by business, it is nonetheless reassuring to see concrete evidence of inflation falling to within striking distance of the Bank of England’s inflation target. The latest data provides concrete evidence that the inflationary battle is now well and truly under control, and provides justification for an early cut to interest rates.

“Inflationary pressures have now been largely squeezed out of goods markets, where inflation is running at only 1.1%. Price rises have also been moderating in the food, restaurants and hotel sectors, which until recently were significant areas of concern. However, there is still further to go in terms of service sector inflation, where prices are still rising at a stubbornly high rate of more than 6%.

“The journey towards lower inflation has been painful and costly for business. However, this data demonstrates that there is light at the end of the inflationary tunnel. Although business confidence in the UK economic outlook remains at depressed levels, today’s figures provide a welcome tonic.”