Inflation remains at 3% as Middle East conflict expected to hike prices

The rate of Consumer Prices Index (CPI) inflation was unchanged from the level reported in January, the Office for National Statistics (ONS) said.

It was in line with predictions from economists.

However, the steady picture for inflation does not yet reflect the impact of the conflict in the Middle East on the cost of living, with the first attacks taking place at the very end of February.

Chancellor Rachel Reeves said: “In an uncertain world we have the right economic plan, taking a responsive and responsible approach to supporting working people in the national interest.

“We’re taking £150 off energy bills and providing targeted support for those facing higher heating oil costs.

Read More: What is behind the Bank’s latest rates decision and inflation warnings?

“We’re also acting to protect people from unfair price rises if they occur, bring down food prices at the till, and cut red tape to boost long-term energy security — building a stronger, more secure economy.”

Oil and gas prices have jumped in recent weeks due to the conflict and other goods prices could also be affected by disruption to shipping through the Strait of Hormuz.

ONS chief economist Grant Fitzner said: “After last month’s slowdown, annual inflation was unchanged in February as various price movements offset each other.

“The largest upwards driver was the price of clothing, which rose this month but fell a year ago.

“This was offset by falls in petrol costs, with prices collected before the start of the conflict in the Middle East and subsequent rise in crude oil prices.”