UK inflation has dropped to three percent following the five-year-high of 3.1 percent.
The ease on UK households has come after lower airfare costs and a drop in the price of games and toys.
This is the first drop in inflation for six months and is expected to lessen economic pressure on UK households.
According to the office for National Statistics, the slowing rate of growth was offset by increasing tobacco prices, as well as a rise in diesel and petrol prices. It is too soon to tell if this is the start of a longer-term reduction in the rate of inflation.
The rise seen over 2017 was partly due to the fall in the value of the pound following the Brexit referendum, which pushed up the prices of imported goods.
“The continued weakness of underlying price pressures means that the MPC has little need to rush the next rate hike,” said Samuel Tombs, chief UK economist at Pantheon Macroeconomics.
Lucy O’Carroll, Aberdeen Standard Investments chief economist, said: “What matters most for the long-term health of the UK economy is improving its productivity performance.
“If we can do that then the Bank of England may be able to keep rates low for a lot longer. But on recent experience, improving productivity is much easier said than done.”
Whether the fall in inflation is enough for households to feel a difference is up for debate. Laith Khalaf, senior analyst at Hargreaves Lansdown said that the drop in inflation was not enough to “significantly ease the pressure on UK household spending” as wages are still rising at a much slower rate.
However, if wages increased at a better pace then “a sustained trend of falling inflation and better wage growth could spell happier times for the UK consumer, and the UK economy”.