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Inflation stays at 3%

ended 25. March 2026

The Consumer Prices Index (CPI) rose by 3.0% in the 12 months to February 2026, unchanged from the 12 months to January. On a monthly basis, CPI rose by 0.4% in February 2026, the same rate as in February 2025.

Grant Fitzner, Chief Economist, ONS, said: “After last month's slowdown, annual inflation was unchanged. 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. A fall in the cost of alcoholic drinks due to promotional activity, compared with a rise last year, was also a downward driver, while little change in food prices, again compared with a small rise this time last year, added further downward pressure.”

Other key data below. Any thoughts on what this means for interest rates, mortgage rates, savers, the Pound, markets and asset classes, ASAP please.

  • Clothing made the largest upward contribution to the monthly change in both CPIH and CPI annual rates; motor fuels made the largest, offsetting, downward contribution.
  • Core CPIH (CPIH excluding energy, food, alcohol and tobacco) rose by 3.4% in the 12 months to February 2026, up from 3.3% in the 12 months to January; the CPIH goods annual rate was unchanged at 1.6%, while the CPIH services annual rate eased slightly from 4.3% to 4.2%.
  • Core CPI (CPI excluding energy, food, alcohol and tobacco) rose by 3.2% in the 12 months to February 2026, up from 3.1% in the 12 months to January; the CPI goods annual rate was unchanged at 1.6%, while the CPI services annual rate eased slightly from 4.4% to 4.3%.
  • The Consumer Prices Index including owner occupiers' housing costs (CPIH) rose by 3.2% in the 12 months to February 2026, unchanged from the 12 months to January.
  • On a monthly basis, CPIH rose by 0.4% in February 2026, the same rate as in February 2025.

5 responses from the Newspage community

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Ben Perks
Managing Director at Orchard Financial Advisers
This is simply the quiet before the storm. It doesn't take into account the impending doom that's incoming in the form of war-fulled inflation. The CPI data is pre-Iran conflict and Trumpflation hadn't taken hold of the UK when this data was being collated. As prices climb over the coming weeks and months I’d expect to see a sharp rise in the figures in the next set of data. Just a month ago, Andrew Bailey was hopeful of a return to 2% inflation, now, we are staring down the barrel of the cost of living crisis 2.0.
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Craig Fish
Director at Lodestone Mortgages
February's inflation figures came in as expected at 3%, but that's almost irrelevant now. These numbers predate the conflict in the Middle East, and the Bank of England has already flagged CPI could climb toward 3.5% by Q3. Core at 3.2% shows underlying pressure isn't going anywhere either. The 2% target feels like a distant memory right now. Rate cuts? Don't hold your breath. With swap rates jittery and global uncertainty ratcheting up, the Bank of England is stuck between a rock and a hard place. Do they hold and risk choking the economy or cut and risk reigniting inflation? Mortgage holders hoping for relief in 2026 need to plan for rates staying higher for longer than anyone wanted.
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Rohit Kohli
Director at The Mortgage Stop
This inflation figure is already out of date. The ONS collected prices before the Middle East war broke out. In short, the oil price spike and market jitters are invisible, at least for now. Worryingly, core inflation actually rose, while services inflation is still sticky at 4.3%. The Bank of England held last week because they saw this coming. First-time buyers and anyone rolling off a fix need to stop waiting for the right moment, as it may not come.
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Riz Malik
Independent Financial Adviser at R3 Wealth
We were heading towards Eldorado before Trump released an inflationary hand grenade when he started this war with Iran and drove up energy costs. We are far away from Kansas now, Dorothy.
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Emma Jones
Managing Director at Whenthebanksaysno.co.uk
This inflation data won't age well at all. It's yet to feature the impact of the war in the Middle East, which is feeding inflation into the economy at pace. Expect the numbers in the months ahead to show inflation heading north again.