| Consensus | Consensus Range | Actual | Previous | Revised | |
| Month over Month | 0.4% | 0.2% to 0.5% | 0.4% | -0.5% | 0.4% |
| Year over Year | 3.0% | 2.8% to 3.1% | 3.0% | 3.0% | |
| Core CPI - M/M | 0.6% | -0.6% | |||
| Core CPI - Y/Y | 3.2% | 3.1% |
Highlights
United Kingdom CPI data for February show steady inflation. The headline consumer price index rose 0.4 percent on the month in February, as it did in January, with inflation unchanged at 3.0 percent. This is the lowest headline inflation since March 2025.
The core index rose 0.6 percent on the month after a previous decline of 0.6 percent, with core inflation picking up slightly from 3.1 percent to 3.2 percent. CPI including owner occupiers' housing costs (CPIH)rose 0.4 on the month, matching the increase recorded in January, with inflation unchanged at 3.2 percent.
The biggest factors pushing up CPIH inflation in February were clothing and footwear, miscellaneous goods and services, and furniture and household goods. Most other categories made a negative contribution, with the biggest declines recorded for transport costs and alcohol and tobacco prices.
Market Consensus Before Announcement
CPI expected up 0.4 percent on the month and 3.0 percent on year in February after declining by 0.5 percent on the month in and the same 3.0 percent on year in January.
Definition
The consumer price index (CPI) is an average measure of the level of the prices of goods and services bought for the purpose of consumption by the vast majority of households in the UK. It is calculated using the same methodology developed by Eurostat, the European Union's statistical agency, for its harmonised index of consumer prices (HICP). The CPI is the Bank of England's target inflation measure.
Description
The consumer price index is the most widely followed indicator of inflation. An investor who understands how inflation influences the markets will benefit over those investors that do not understand the impact. In countries such as the UK, where monetary policy decisions rest on the central bank's inflation target, the rate of inflation directly affects all interest rates charged to business and the consumer. Inflation is an increase in the overall price level of goods and services. The relationship between inflation and interest rates is the key to understanding how indicators such as the CPI influence the markets - and your investments.
Inflation (along with various risks) basically explains how interest rates are set on everything from your mortgage and auto loans to Treasury bills, notes and bonds. As the rate of inflation changes and as expectations on inflation change, the markets adjust interest rates. The effect ripples across stocks, bonds, commodities, and your portfolio, often in a dramatic fashion.
By tracking inflation, whether high or low, rising or falling, investors can anticipate how different types of investments will perform. Over the long run, the bond market will rally (fall) when increases in the CPI are small (large). The equity market rallies with the bond market because low inflation promises low interest rates and is good for profits.
For monetary policy, the Bank of England generally follows the annual change in the consumer price index which is calculated using the European Union's Eurostat methodology so that inflation can be compared across EU member states.