UK headline consumer price inflation held at 3.0% year-over-year in February, the Office for National Statistics reported, matching the rate recorded in January. While the headline figure was unchanged, core inflation - which strips out energy, food, alcohol and tobacco - inched up by 0.1 percentage point to 3.2%.
Barclays noted the headline outturn was 0.04 percentage points above the Bank of England's February Monetary Policy Report forecast and 0.07 percentage points higher than Barclays' own expectation.
Behind the aggregate numbers there were notable divergences across components. Core goods inflation accelerated by 0.5 percentage points to 1.3% year-over-year, a rise Barclays attributes to price increases in both durable and semi-durable goods. In contrast, services inflation moderated slightly, slowing 0.1 percentage points to 4.3%.
Within services, transport services reaccelerated, rising 0.4 percentage points to 6.3% - a move the ONS linked to stronger-than-expected rail fares and maintenance costs. Food, alcohol and tobacco inflation decelerated by 0.4 percentage points to 3.4%, a softer outturn than Barclays' 3.6% forecast.
Producer price measures showed mixed momentum. Producer input price inflation increased by 0.9 percentage points to 0.5% year-over-year, while producer output price inflation eased by 0.8 percentage points to 1.7%. Domestic food input price growth slowed by 0.9 percentage points to 0.4% - a development that suggested further easing in consumer food inflation was likely before recent energy price movements.
Market and consumer expectations shifted notably in March. The Citi/YouGov series showed one-year-ahead inflation expectations jumped 2.1 percentage points to 5.4%, the highest reading since 2023. Expectations further out rose by 0.9 percentage points to 4.5%, a level above the June 2025 peak of 4.3% recorded in that series.
The retail price index for February printed at 408.2, a 0.44% increase month-over-month and a 3.60% increase year-over-year, roughly 5 basis points below Barclays' forecast for the series.
Barclays cautioned that the informational value of February's data for near-term forecasts is limited given anticipated increases in energy prices and ongoing uncertainty stemming from developments in the Middle East. Those factors, Barclays said, complicate the signal the February readings provide about the inflation path going forward.
Data notes: All percentage point moves and levels are reported year-over-year unless otherwise stated. References to forecasts are Barclays' internal expectations and the Bank of England's February Monetary Policy Report projections as cited in the ONS release.