UK inflation was lower than expected, at 3.4% year-on-year in February, its lowest point since September 2021. Downward pressure came from food, restaurants, and cafes, while housing and fuel pushed prices up. Core inflation, excluding volatile items, was 4.5%, below estimates. The Bank of England expects headline inflation to temporarily hit 2% in Q2 before rising again. It meets on Thursday and is expected to keep rates at 5.25% as it weighs rate cuts.