Inflation fell to 3.4% in February, the lowest level for two and a half years, driven largely by a slowdown in the pace of food and restaurant price rises.
Data from the Office for National Statistics (ONS) revealed food prices were almost flat this year compared with a large increase in 2023, while restaurant and café price rises also slowed.
ONS chief economist, Grant Fitzner, said: “These falls were only partially offset by price rises at the (fuel) pump and a further increase in rental costs.”
Kate Nicholls, Chief Executive of UKHospitality, said: “Inflation falling to its lowest level in almost two and a half years is a significant milestone and I’m hopeful this trend will continue.
“We must not forget that this still means prices are continuing to rise, albeit more slowly, and hospitality businesses continue to face the brunt of those price rises.
“Yet more costs are being piled on in just under two weeks when both labour costs and business rates rise considerably.
“It’s disappointing that the Government is proceeding with an above-inflation increase in business rates and this, combined with wage increases, will pile the pressure on businesses, who are trying to keep a lid on price increases for customers.
“I hope this drop in inflation will provide a boost in consumer confidence and also prompt further economic good news, particularly through a cut in interest rates.”
