PwC comments on the March 2025 ONS CPI figures

Commenting on the Office of National Statistics Consumer Price Index for February 2025,

Adam Deasy, Economist at PwC, comments:

“Inflation continues to keep forecasters on their toes. After a surprise jump last month to 3%, inflation has come in below expectations at 2.8% for the 12 months to February 2025. Clothing was the largest downward contributor, where prices fell from January to February for the first time since 2021, with recreation and furniture also bringing the figure down.

“This piece of good news may still represent a temporary breather. April’s usual round of regulated price changes are expected to push inflation higher again in the near term, services inflation remains high, staying at 5%, and global geopolitical uncertainty is ever-present. Inflation expectations can be a self-fulfilling prophecy and those expectations are on the rise. 

“This data is a step in the right direction for the Bank, but it remains a single step. The potential need to support growth in the UK will also be a factor when they next meet in May. Today’s release comes ahead of the Chancellor’s Spring Statement at lunchtime and a likely downward revision to GDP growth forecasts from the OBR. Should next month’s data releases spell out a similar story on both fronts, the likelihood of the quarterly rate-cutting continuing is high. For now, it's still a waiting game.”