Matt Swannell, chief economic adviser to the EY ITEM Club, explained that the headline figure masked competing pressures.

“The main source of upward pressure came from an unwinding of last year’s unusually weak outturn in the clothing sub-category,” he said. “Offsetting pressure came from weaker food price inflation, while there was also a 1.1% month-on-month fall in petrol prices between January and February, compared to a 1.5% increase between those months last year. Meanwhile, services inflation also edged slightly lower.”

However, Mr Swannell cautioned that the picture is set to deteriorate rapidly. “Rising inflation in the coming months is all but guaranteed as the impact of the Middle East conflict feeds through,” he said. “High-frequency data suggests petrol prices have already increased sharply over the past few weeks in response to higher oil prices. Domestic energy bills are also set to rise substantially in July, when the next change in the energy price cap comes into force.”

He added that EY ITEM Club expects headline inflation to top 4% in the second half of 2026, before beginning to unwind over the course of 2027.

The implications for interest rates are equally significant. Because February’s data predates the outbreak of conflict, Mr Swannell said it “will have little bearing on upcoming interest rate decisions,” adding that “with the growth outlook weak, unemployment high and rising, and policy already restrictive, we think a prolonged hold for Bank Rate is the most likely outcome.” Nevertheless, the EY ITEM Club has not ruled out rate rises if higher inflation feeds through to pay settlements.

The concern extends well beyond England’s borders. Kevin Brown, savings specialist at Scottish Friendly, acknowledged that January’s 0.5% growth in Scottish GDP was welcome, but argued that the figures were fast becoming redundant. “The global economy has been turned on its head in the past few weeks,” he said. “War in the Middle East has sent energy prices soaring, which has led to a spike in mortgage rates for homeowners here in the UK.”

Mr Brown also raised the prospect of disruption to key Scottish exports. “The concern is also that the conflict will have a deep and negative impact on key exports such oil, whisky and salmon, which could face disruption if ships remain fearful of passing through critical transit points such as the Strait of Hormuz.”

Emeritus Professor Joe Nellis, economic adviser at MHA, arguing that the crisis carries structural consequences that could outlast the conflict itself. “The impact will be even greater than that caused by Russia’s invasion of Ukraine in 2022,” he warned. “With energy facilities severely damaged and production grinding to a halt across the Middle East, there is now a long-term, structural supply-side issue in the energy market. Even if the war was to stop today, the damage has been done and long-term implications are inevitable.”

Mr Nellis pointed to the broader fiscal pressures bearing down on the UK government, with UK bond yields at some of their highest levels since 2008 and growth forecasts for 2026 falling as low as 0.6%. With the Bank of England signalling it is “ready to act” to prevent escalating inflation, further rate rises could yet dampen economic activity further.

“At the Spring Statement, the economy appeared to be approaching a period of stability, if not yet growing at any great pace,” he said. “Only weeks later, the road ahead looks considerably bleaker.”