UK inflation falls to 3.4 in Feb from 4.0
Data bolsters expectations for rate cuts
Inflation rate still highest among G7
BoE still expected to hold rates on Thursday
Finance minister Hunt says data backs taxcutting drive

LONDON, March 20 Reuters British inflation slowed in February, keeping the Bank of England on track to start cutting interest rates in the months ahead and offering some better economic news to Prime Minister Rishi Sunak before an election expected later this year.

Consumer prices rose by 3.4 in annual terms after a 4.0 increase in January, the weakest rate of inflation since September 2021, official data showed on Wednesday.

A Reuters poll of economists and the BoE39;s own forecast published last month had pointed to an annual rate of 3.5.

Food and prices at eateries were the biggest downward drags, offset by motor fuels, the Office for National Statistics said.

Core inflation, which excludes energy, food and tobacco prices, also slowed, dropping to 4.5 from 5.1 in January. The Reuters poll had pointed to a reading of 4.6.

The BoE39;s Monetary Policy Committee MPC is likely to leave interest rates on hold on Thursday, as is the U.S. Federal Reserve which publishes its decision later on Wednesday.

Today39;s inflation numbers do not change our view … that the MPC is likely to convey the message that it has an eye on easing policy rates this year, but the hurdle to do so has not yet been overcome, Ellie Henderson, an economist with…