UK inflation has fallen back to 2.8%, giving Rachel Reeves some positive news before she makes her spring statement.

The Office for National Statistics said annual inflation as measured by the consumer prices index cooled last month, resuming a downward trajectory after an increase to 3% in January from 2.5% in December.

City economists had forecast a modest decline to 2.9%, indicating prices are continuing to climb on an annual basis, albeit at a slower rate.

The figures come before the chancellor’s address to the Commons later on Wednesday, in which Reeves is expected to present gloomy forecasts for the economy and public finances from the Office for Budget Responsibility.

Britain’s economy has come close to stagnation in recent months as households remain under pressure from high prices and elevated borrowing costs. Business and consumer confidence has also fallen sharply amid concerns over the impact of government tax increases and Donald Trump’s trade wars.

Inflation has risen in recent months, reflecting higher wholesale energy costs and rising food prices, in a renewed squeeze for households. The headline rate had fallen back from a peak of more than 11% in the second half of 2022 to 2% last summer, although it has steadily drifted higher in recent months.

The Bank of England has warned inflation could rise to a fresh peak of about 3.7% later this year, almost twice its 2% target rate, with the potential to limit its capacity for deeper interest rate cuts.

More details soon …