British inflation figures on Wednesday delivered some better news than a month ago with the annual increase slowing to 2.8% in February from January’s surprise 3%. And the biggest impact on the number? Clothing.
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First, the headlines. The Office for National Statistics announced the new figures and they came as a surprise with analysts having been touting less of a slowdown — assuming that inflation would have ticked up by 2.9%.
Admittedly, the Bank of England doesn’t think the slowdown will last and is predicting a 3.75% rate in Q3 as energy costs, household utility bills and public transport fares all rise.
But for now, the news is good. The ONS said that as well as the Consumer Prices Index (CPI) rising by 2.8%, February’s Consumer Prices Index including owner occupiers’ housing costs (CPIH) rose by 3.7%, down from January’s 3.9%.
Month-on-month, both CPI and CPIH rose by 0.4% in February 2025, compared with a rise of 0.6% in February 2024.
As mentioned, the largest downward contribution to the monthly change in both CPIH and CPI annual rates came from clothing. That’s perhaps a reflection of the fashion sector responding to sluggish consumer demand and other factors with more markdowns and/or lower initial ticket prices.
The CPIH annual rate for clothing and footwear had been 1.8% in January but was -0.6% in February. The February figure was the first negative annual rate since October 2021 when the pandemic had a distorting effect on overall patterns.
The easing in the annual rate was mainly the result of “a large downward effect from garments for women, with small downward effects coming from a range of women’s clothing items”. There were additional small downward effects from kidswear, and other clothing and clothing accessories, such as hats and women’s scarves.
On a monthly basis, prices fell by 0.3% in February 2025 compared with a rise of 2.1% a year ago. Prices normally rise in February as the spring product ranges start to enter the shops following the January sales period.
