British inflation is set to average 3.2% in 2025, according to forecasts from the Office for Budget Responsibility published on Wednesday.

But the OBR upgraded the growth forecasts it previously set in October last year for the four years from 2026. It now expects the economy to grow by 1.9 per cent in 2026, 1.8 per cent in 2027, 1.7 per cent in 2028, and 1.8 per cent in 2029.

The Office for Budget Responsibility now thinks the economy will grow by only 1% in 2025.

The Office of National Statistics (ONS) recently revealed in the latest inflation report that the UK's inflation rate dropped to 2.8% in February, compared to 3.0% in January. The February inflation slowed down more than expected by economists,

Inflation cooled a little during February but remained well above the Bank of England’s target, likely keeping policymakers cautious as they mull further rate cuts.

Falls in the cost of clothing, kitchenware and air travel contributed to an overall easing of the UK’s inflation rate last month, though prices accelerated for a handful of everyday groceries including eggs and sugar.