A fall in inflation to its lowest rate since July 2017 should alleviate concerns over further interest rate rises, business leaders said today.

Consumer price inflation fell from 3 per cent to 2.7 per cent in February, with falling petrol prices and a slower rise in the cost of food cited as contributing factors.

It is hoped the fall will ease pressure on the Bank of England to raise interest rates.

There had been speculation it could raise rates at its meeting in May.

Greater Birmingham Chambers of Commerce chief executive Paul Faulkner (pictured) said: “While it was pleasing to see the rate of inflation fall to its lowest level in over six months, the figure for February is still way short of the Bank of England’s target rate of 2 per cent.

“Since the referendum result, households have struggled with a squeeze on living standards, so hopefully today’s results, coupled with the announcement that nominal wages have seen an uplift in the last few months, will start to lessen the pressure on consumers – however, it remains to be seen whether this will translate to an increase in real wages.

“Lower levels of inflation might also rein in the more hawkish sentiments from the Bank of England concerning a further interest rate rise later this year, a move which will no doubt please the city and see a spike in the value of the pound.

“Data from our latest Quarterly Business Report suggests that price pressures have slightly eased for local firms over the last few months and it will be interesting to see if this trend continues into the summer.”

The Greater Birmingham Chambers of Commerce’s next Quarterly Business Report will be launched with an event at Birmingham City University on 17 April.