The Office for National Statistics confirmed that the UK headline CPI remained unchanged at 3.0% in the twelve months to February, landing broadly in line with expectations. Core CPI edged higher to 3.2%, a signal that underlying domestic price pressures have not fully dissipated.
Key Takeaways
- CPI (12-month): 3.0% in February 2026, unchanged from January 2026
- Core CPI ticked up to 3.2% from 3.1% versus expectations of holding steady
- Services inflation eased slightly to 4.3% from 4.4% — the lowest reading since March 2022
- Goods inflation held steady at 1.6%; clothing & footwear was the largest upward contributor to the monthly change; motor fuels and alcohol & tobacco were the largest offsetting drags
- Motor fuel prices fell 4.6% in the year to February; petrol averaging 131.6p/litre, the cheapest since June 2021.
Note: All fuel prices were collected before the outbreak of conflict in the Middle East on 28 February 2026
February’s U.K. inflation print looked calm on the surface. Headline CPI staying locked at 3.0% for a second consecutive month suggested the disinflation trend that defined much of 2025 has found a temporary plateau, rather than reversed.
Underlying components, however, painted a more nuanced picture of domestic price pressures. Easing services inflation is now at its lowest level since 2022, offering some encouragement for the Bank of England’s medium-term target path. Housing and household services made the largest contribution to the annual rate for the eleventh consecutive month in CPI terms.
Link to official ONS U.K. CPI (February 2026)
Meanwhile, motor fuel prices in February were still reflecting the pre-conflict energy environment. That means the drag from fuel, which meaningfully helped keep the latest inflation print contained, is unlikely to persist into coming months.
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Market Reactions
British Pound vs. Major Currencies: 5-min
GBP Overlay 5-min – Chart Faster with TradingView
Sterling, which ticked briefly higher from its earlier downtrend leading up to the CPI release, had a mixed reaction to the numbers that did little to influence BOE policy expectations.
GBP edged slightly lower across the board within the hour after the numbers were printed, before eventually finding a bottom and recovering to intraday highs a couple of hours after the report.
The U.K. currency struggled to hold on to its gains towards the latter half of the London session, though, falling 0.38% to USD and 0.14% to JPY as broader risk-off flows on geopolitical tensions remained in play while staying in positive territory against AUD (+0.19%) and CHF (+0.13%).
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