Inflation drops to lowest level in over two years

Inflation fell to 3.4% in February, down from 4% in January and edging closer to the Bank's target of 2%.

The drop means the cost of living is at its lowest level since September 2021, when it stood at 3.1%.

Inflation, the rate at which prices rise over time, has been gradually falling since it hit 11.1% in October 2022, its highest rate for 40 years.

However, prices are not yet falling they are just rising less quickly than they were previously.

Most economists had predicted the drop and said it would further expectations that the Bank of England will cut interest rates later in the year.

The figure comes ahead of its latest interest rate decision on Thursday, which is expected to see rates held at 5.25%.

While the drop in inflation will be welcomed by the government it follows official data last month which confirmed that the UK fell into recession at the end of last year.