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UK Inflation holds at 3% – what does it mean for your money?

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UK Inflation holds at 3% – what does it mean for your money?

Prices in the UK rose 3% in the year to February, the same rate recorded for the previous month, according to the latest Office for National Statistics (ONS) data.

Inflation measures the increase of goods and services over time.

Although the inflation rate held steady, it doesn’t take into account the impact of the escalating conflict in the Middle East, which caused a surge in oil and gas prices.

The current level of inflation is still above the Bank of England’s target of 2%.

Why are prices rising?

Rising clothing and footwear prices were the largest contributing factor to the current level of inflation.

These costs saw a 0.9% jump in the 12 months to February compared to no increase in the 12 months to January.

Food inflation slowed from 3.6% to 3.3% in February.

However the ongoing crisis in the Middle East could result in an 8% jump in food prices by June 2026, according to analysis from the Institute of Grocery Distribution (IGD).

Can you beat inflation?

Protecting your spending power is key. Although price changes are out of your control, there are ways to minimise the impact on your finances.

Shopping smart is a great first step. Comparing prices at different supermarkets for your food shop, or petrol stations for refuelling can help you find the cheapest places to buy your essentials.

Making sure your savings are in an inflation-beating savings account or Cash ISA. That’s because if you’re not earning an interest rate that’s above the current rate of inflation, your cash loses value because you won’t be able to buy as much with it.

Clare West
Clare West Finance Editor

As a finance writer and editor, I can’t make decisions for you because only you know what’s right for you, and your personal priorities and goals. My role is to understand the things that are going to be important to you, remove anything that could work as a barrier to understanding, and then ensure you don’t miss a thing.

It’s an approach that has won me awards from professional bodies (‘Website of the Year’ at the Professional Adviser Awards 2021; Finalist – ‘Start Up of the Year’ at the UK FinTech Awards 2025) and seen me featured in the press as a commentator and expert.

Finances are about so much more than numbers on a page. Achieving your financial goals allows you to feel peace of mind, have confidence in your future, and achieve the things that matter to you. Financial wellbeing allows for life goal fulfilment.

I’ve spent more than a decade specialising in writing about financial services, so I know that in financial services, trust is absolutely vital. I am delighted, therefore, that everything we do at Investing Insiders centres around trust. Our mission is to write honest reviews based on our personal opinions and professional insights. We are not swayed in our opinions by incentives or influences from providers. Where we have a relationship with a provider that could affect our neutrality, we will let you know. But we are clear; whatever relationship we have with providers, our reader comes first. Simply put, we can’t be paid to change our opinion. My obligation is to you, the saver or investor, looking to build your wealth and protect your future.

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