UK inflation surprisingly fell back last month as widespread discounting from clothes retailers offset increases in supermarket food prices.
Services sector inflation remained stubbornly high and may prevent the Bank of England from stepping up the pace on interest rate cuts.
The consumer price index was up 2.8% in February, the Office for National Statistics revealed, down from 3.0% in January, where the market expected it to remain.
CPI was up 0.4% month-over-month, which was less than expected, and so was core CPI, which strips out more volatile prices such as fuel and food, at 3.5%, down from 3.7% in January.
Services industry CPI, which the BoE's Monetary Policy Committee is keeping a close eye on as a gauge of the persistence of inflation, rose 5.0% as it did in January.
"Inflation eased in February," said ONS chief economist Grant Fitzner. "Clothing prices, particularly for women’s clothes, was the biggest driver for this month’s fall.
"This was only partially offset by small increases, for example, from alcoholic drinks."
Pantheon Macroeconomics economist Rob Wood said the fall might make it "fractionally easier" for the MPC to cut interest rates in May, because headline inflation matched rate setters forecast, rather than overshooting as in January.
However, he and most other economists expect a bounceback in March, when data will be published ahead of the MPC’s next meeting.
February, said Wood, was "the calm before the storm of annual price resets, government-set price hikes and tax rises" that are likely to boost headline CPI inflation to 3.5% in April and then to a peak of 3.7% in September, in his view.
He is one of many who expects two more BoE rate cuts this year, in May and November, though the "wild card" of President Trump's April 2 tariffs "could crystalise downside risks to the global economy that keep the MPC wanting to ease policy".
Matt Swannell, chief economic advisor to the EY ITEM Club, also agreed that February's CPI is "likely to represent the calm before the storm, with several factors set to push inflation materially higher over the rest of this year", including a significant rise in water bills and a 6.4% uptick in Ofgem's energy price cap.
Unless a price war breaks out, businesses are also expected to gradually pass on some of the rise in labour costs caused by increases in employers' NICs and the National Living Wage announced in the Autumn Budget, which Swannell said should slow the fallback in services inflation this year.
"There is little in today's release that should move the needle on the monetary policy outlook. We expect rate cuts at alternate meetings to remain the norm until at least August, which is when the MPC will be able to digest evidence on both the scale of April's indexed price increases and how the NICs and National Living wage rises are playing out," he said.