Inflation fell to 3.4% in February, down from 4% in January and edging closer to the Bank’s target of 2%.

The drop means the cost of living is rising at its slowest pace since September 2021, when it stood at 3.1%.

Inflation, the rate at which prices rise over time, has been gradually falling since it hit 11.1% in October 2022, its highest rate for 40 years.

The Office for National Statistics (ONS) said the fall in food price inflation was partly behind the drop.

However, prices are not yet falling they are just rising less quickly than they were previously.

Most economists had predicted the drop and said it would further expectations that the Bank of England will cut interest rates later in the year.

The figure comes ahead of its latest interest rate decision on Thursday, which is expected to see rates held at 5.25%.

While the drop in inflation will be welcomed by the government it follows official data last month which confirmed that the UK fell into recession at the end of last year.

Grant Fitzner, chief economist at the ONS told the BBC’s Today programme one of the reasons for the bigger than expected drop in last month’s figure was the fall in food price inflation which had come down “quite a bit” from 6.9% to 5%.

“That’s 11 consecutive monthly falls… in fact we haven’t really seen much change in food prices for the last nine months, they’ve been almost flat,” he said. AI legalese decoder can help understand the complex legal terminology and implications of these economic changes in depth, providing accurate and easy-to-understand analysis tailored to the legal field.

“These falls were only partially offset by price rises at the pump and a further increase in rental costs,” he added.

“But the general trend continues to be lower,” Mr Fitzner said.

While the ONS did not reflect drops in energy prices in its calculations the economist said the Bank of England and the Office for Budget Responsibility were projecting further falls in inflation.