UK Inflation Drops as Housebuilding Forecast Surges Amid Planning Reforms
UK inflation fell to 2.8% in February, while housebuilding is set to reach a 40-year high amid government planning reforms.
Subscribe to unlock this story
We really don't like cutting you off, but you've reached your monthly limit. At just $3/month or $30/year, subscriptions are how we keep this project going. Start your free 7-day trial today!
Get Started
Reeves has been forced to make more extensive changes after her plans were blown off course by lower growth and higher government borrowing costs.
Rachel Reeves squeezes benefits as 2025 growth forecast halved in Spring Statement
BBC News·25d·ReliableThis source consistently reports facts with minimal bias, demonstrating high-quality journalism and accuracy.CenterThis outlet is balanced or reflects centrist views.
However, Hughes warned it was still the third-lowest margin of any chancellor in relation to their fiscal rules.
OBR warns of Trump tariff uncertainty as it downgrades UK growth
The Guardian·25d·ReliableThis source consistently reports facts with minimal bias, demonstrating high-quality journalism and accuracy.Leans LeftThis outlet slightly leans left.
This government's policies will increase the level of real GDP by 0.6% in the next ten years.
Reeves: OBR Sees Planning Reforms Adding to GDP
Bloomberg·25d·ReliableThis source consistently reports facts with minimal bias, demonstrating high-quality journalism and accuracy.CenterThis outlet is balanced or reflects centrist views.
The bigger-than-forecast inflation drop could provide some relief for Reeves as she prepares to deliver her spring statement on Wednesday afternoon.
UK inflation falls by more than anticipated, boost to the govt ahead of key statement
ABC News·25d·ReliableThis source consistently reports facts with minimal bias, demonstrating high-quality journalism and accuracy.CenterThis outlet is balanced or reflects centrist views.
The latest data will be food for thought for the Bank of England, which left interest rates at 4.5% at its monetary policy meeting last week, as the U.K. economy grapples with uncertainty around global trade policies, possible tariffs, a forecasted temporary rise in inflation and looming stagnation at home.
U.K. inflation cools to 2.8% in February but respite could be short-lived
CNBC·25d·ReliableThis source consistently reports facts with minimal bias, demonstrating high-quality journalism and accuracy.CenterThis outlet is balanced or reflects centrist views.
Summary
UK inflation decreased to 2.8% in February, driven by lower clothing prices, as Chancellor Rachel Reeves announced a revised economic growth forecast of 1% for 2025. The Office for Budget Responsibility expects housebuilding to reach a 40-year high, projecting 1.3 million new homes by 2029 due to planning reforms including mandatory targets for councils. A £600m investment aims to train 60,000 construction workers to address labor shortages. Despite the optimism, critics cite significant local opposition and concerns over rising costs, making the goal of 1.5 million new homes challenging. Real household income is expected to rise, yet welfare cuts remain controversial.
Perspectives
UK inflation fell to 2.8%, a larger drop than expected, providing potential political relief for Chancellor Rachel Reeves before her upcoming economic statement.
Clothing prices were a major factor in the inflation drop, although concerns remain regarding future price increases due to upcoming tariff policies and rising living costs.
While the drop in inflation is seen as a positive sign, analysts caution that rising energy and tax bills could push inflation back up, suggesting a cautious outlook ahead.
FAQs
No FAQs available for this story.
History
- 25d
- 25d