Time to wrap up…

Here are today’s main stories so far, first on inflation:

And in other news…..

• Boeing has warned that it will burn more cash in the first quarter than previously expected as the US jet maker grapples with the 737-Max crisis.

• Chip giant Intel has secured nearly $20bn in grants and loans from the US government.

Back in the transport sector, the aviation regulator has reignited the long-running row between Heathrow and its airlines over how much the airport can charge in take-off and landing fees.

The Civil Aviation Authority said this morning it could lower by 6% the proposed cap on passenger charges paid by airlines for 2025 and 2026, following a reassessment.

The CAA is proposing that per-passenger charges are cut by roughly 6%, or £1.52 to £23.72 in 2025 and by £1.58 in 2026 to £23.70. Previously it had said the charge per passenger should be £25.43 in 2024, £25.24 in 2025 and £25.28 in 2026.

Heathrow had already been disappointed by the original charges – it had pushed for an increase to more than £40 a passenger, up from £31.57 in 2023.

The airport says:

“We will review the impact of the CAA’s latest proposals and respond to the consultation in due course.”

Here’s our full story on the tax helpline about-turn:

Aeroplane manufacturer Boeing has admitted this morning that it will burn through more cash than expected this quarter, as it grapples with regulatory scrutiny and slower output of its 737 Max jetliner.

Following the January mid-air accident, in which a door panel blew out mid-flight, Boeing now expects to cash outflows to hit $4bn-$4.5bn in the first quarter of 2024, higher than forecast in January.

Brian West, Boeing’s chief financial officer, also told a Bank of America conference in London today that a plan to reach a $10bn cash flow target by 2025-2026 would also take longer.

West explained:

“We’re not at the moment where we can manage the near term for these financial outcomes because of the work at hand around stability.

Our expectation is that we’ll get more predictable and better positioned, but it will take time.”

West also revealed that margins at Boeing’s commercial aircraft business will be negative, by around 20%, in the first quarter as the company pays out compensation for the early January fuselage failure, Bloomberg reports.

While margins will improve for the year, they will remain negative for 2024, he added.

Newsflash: HM Revenue and Customs has halted its plan to scale back its telephone helplines, following a loud backlash yesterday.

HMRC says the plan – which included turning off its self-assessment helpline for six months a year, and cutting back other services, would be halted while it engages with its stakeholders about how to ensure all taxpayers’ needs are met.

The plan was part of HMRC’s attempt to move more people onto its online services, but was heavily criticised yesterday; the Chartered Institute of Taxation called the decision “misguided”, while Conservative MP Harriett Baldwin said it was a “great shame”.

Today, HMRC chief executive Jim Harra says the tax authority has listened to feedback.

Explaining today’s sharp u-turn, Harra says:

Making best use of online services allows HMRC to help more taxpayers and get the most out of every pound of taxpayers’ money by boosting productivity.

Our helpline and webchat advisers will always be there for those taxpayers who need support because they are vulnerable, digitally excluded or have complex affairs.

However the pace of this change needs to match the public appetite for managing their tax affairs online.

We’ve listened to the feedback and we’re halting the helpline changes as we recognise more needs to be done to ensure all taxpayers’ needs are met, whilst also encouraging them to transition to online services.

The Federation of Small Businesses has welcomed the decision to halt the “ridiculous” plan:

Earlier this morning the Telegraph reported that chancellor Jeremy Hunt had ordered HMRC to scrap its plans to close its phone lines over the summer.

Newsflash: Londoners are facing more industrial action on the tube in the next two months.

Train drivers on the London Underground will take strike action on April 8 and May 4 in a long-running dispute over working conditions, the ASLEF trade union has announced.

ASLEF says the train network had failed to give assurances over changes to their working terms and conditions.

Finn Brennan, the union’s organiser on London Underground, explains:

“Despite a previous commitment to withdraw plans for massive changes to drivers’ working conditions, London Underground management has established a full-time team of managers preparing to impose their plans.

“They want drivers to work longer shifts, spending up to 25% more time in the cab, and to remove all current working agreements in the name of flexibility and efficiency.

“Everyone knows what these management buzz words really mean. It’s about getting people to work harder and longer for less.”

Just in: Bakery chain Greggs says it has fixed the IT problem that prevented customers paying for their goods by card.

Greggs also apologises for the disruption, saying:

“We have now resolved the technical issue that affected tills in some of our shops earlier this morning. The majority of shops affected are now able to take card and cash payments again and we expect the issue to be fully resolved shortly.

We apologise for the inconvenience this may have caused to our customers.”

The battle against inflation is being won – and it is being won slightly more quickly than economists expected, our economics editor Larry Elliott writes:

Prices are still going up but the tide has turned. Unless something sudden and unexpected happens, the annual increase in the cost of living will be below the government’s 2% target within months.

Those are the clear messages from the latest inflation data from the Office for National Statistics (ONS). What is less clear is when the Bank of England will start cutting interest rates in response.

The short answer to that question is that a move will not come on Thursday, with Threadneedle Street’s monetary policy committee (MPC) wanting further evidence before acting.

Here’s Larry’s full analysis:

In the technology sector, chip giant Intel has secured nearly $20bn in grants and loans from the US government.

It’s the Biden administration’s largest outlay so far to subsidize leading-edge chip production, as the White House tries to strengthen its domestic semiconductor production.

President Biden is expected to annouce that Intel will receive $8.5bn in grants and up to $11bn in loans when he visits Arizona today.

Some of the funding to be used to build two new factories and modernize an existing one, Reuters reports.

US Secretary of Commerce Gina Raimondo told reporters this is “a huge deal”, Fortune reports, adding:

“It means bleeding-edge semiconductors made in the USA, keeping the USA in the driver’s seat of innovation.”

Newsflash: UK tenants have been hit by soaring rents this year.

The average UK private rent increased by 9.0% in the 12 months to February, new data from the Office for National Statistics shows.

That’s up from 8.5% in January 2024, and is the highest rate since the data series began in January 2015.

The ONS says private rent inflation was highest in London ( at 10.6%) and lowest in the North East (at 5.7%).

Across the country, average monthly rents increased to £1,276 (up 8.8%) in England in the 12 months to February, to £723 (9.0%) in Wales and £944 (10.9%) in Scotland.

The average private rent was highest in Kensington and Chelsea (£3,248) and lowest in Dumfries and Galloway (£472).

The ONS also reports that average UK house prices fell by 0.6% in the 12 months to January 2024, to £282,000, up from a 2.2% drop in the year to December.

Newsflash: Bakery chain Greggs has become the latest UK chain to be hit by IT problems.

Several Greggs customers have reported problems making payments this morning, or that their local store is closed.

Greggs says it is “experiencing issues accepting payments”, Sky News says.

In a statement, the bakery chain added:

“We are working to resolve this as soon as possible.”

Last week, McDonald’s restaurants in multiple countries including the UK and Australia were hit by a “technology outage”.

And both Sainsbury’s and Tesco experienced technical issues that disrupted supermarket deliveries last week.

The fastest inflation fall in nearly half a century suggests UK is on track to hit two per cent target by April, says the Resolution Foundation.

They say the Bank of England will be encouraged that services inflation fell to 6.1% in February, as that is a gauge of domestic inflation.

James Smith, research director at the Resolution Foundation, says:

“The fastest fall in inflation for almost half a century will be welcome news for households – with food inflation falling to its lowest rate in two years – and the Bank of England, as inflation looks on track to hit its 2 per cent target in April.”

“Services inflation also continues to fall which, coupled with falling nominal wage growth, should give monetary policy makers more confidence that wage pressures on inflation are starting to ease.”

Update: this is based on the 7 percentage point fall in the CPI over the last 12 months – from 10.4% in February 2023 to 3.4% last monthe – the largest 12-month period since September 1978.

Digging into today’s CPI report, we can see that food and non-alcoholic beverage inflation slowed sharply last month, to 5% from 6.9%.

Alcohol and tobacco prices rose at a slower pace too, bringing their annual inflation rate down to 11.9% from 12.4%.

A smaller monthly rise in prices meant that Clothing and footwear inflation eased to 5% from 5.6% in January, while furnutire nad household goods prices were flat year-on-year.

This table has more details:

February’s sharp fall in inflation was largely due to base effects, following large rises in food and services prices between January and February last year.

Those base effects, and the drop in energy bills this year, means inflation could fall below the Bank of England’s 2% target soon.

Martin Beck, chief economic advisor to the EY ITEM Club, explains:

“Base effects will remain influential over the next couple of months and, along with a 12% fall in Ofgem’s energy price cap, this should mean inflation falls to, or below, the Bank of England’s 2% target in April.

Furthermore, although only a month of Ofgem’s new observation window has passed, lower wholesale gas prices point to another substantial fall in the energy price cap and household bills in July. So, there’s a good chance that inflation declines well below 2% in the second half of the year.

Today’s inflation report confirms that motor fuel prices picked up in February, but was still cheaper than a year ago (when energy costs were much higher).

The average price of petrol rose by 2.3p per litre between January and February to 142.2p per litre, down from 148p per litre in February 2023, the ONS says.

Diesel prices rose by 3p per litre in February to 151.3p per litre, down from 169.5p in February 2023.

So overall, motor fuel prices fell by 6.5% in the year to February 2024, compared with a fall of 9.2% in the year to January.

UK inflation fell to 3.4% in February – the lowest level for two and a half years – according to official figures that show the annual rate of price rises starting to ease again after remaining unchanged the previous month.

The decline in the consumer prices index (CPI) from 4% in January will give a boost to Rishi Sunak, who has pledged to reduce inflation, and add to speculation that the Bank of England will cut interest rates in the summer.

Most economists had predicted that February’s headline figure from the Office for National Statistics (ONS) would drop to 3.5% – the lowest since September 2021, when it was 3.1%. A reduction in the rate of inflation does not mean that prices are falling, just that they are rising more slowly.

Investors are betting that inflation will tumble further through the spring months, reflecting the sharp decline in the price of natural gas since last year and a slowdown in food price rises.

More here.

Chancellor Jeremy Hunt has claimed that today’s fall in inflation “sets the scene for better economic condition”.

Welcoming the drop in inflation to 3.4% in February, Hunt says:

“The plan is working.

“Inflation has not just fallen decisively but is forecast to hit the 2% target within months.

“This sets the scene for better economic conditions which could allow further progress on our ambition to boost growth and make work pay by bringing down national insurance as we work towards abolishing the double tax on work – but only if we can do so without increasing borrowing or cutting funding for public services.”

Politicians seem, curiously, keener to take responsibility for inflation when it is on the way down. Back in the Autumn Statement of 2022, Hunt told MPs that “The Office for Budget Responsibility confirms global factors are the primary cause of current inflation.”

Some of those global factors, such as high oil prices and supply chain disruption, have faded.

But also, inflation is an annual measure – today’s data is telling us that the cost of living is 3.4% higher than in February 2023, when it was 10.4% higher than February 2022….

The largest downward contributions to the monthly change in inflation came from food, and restaurants and cafes, the ONS says.

Today’s inflation report shows that prices for food and non-alcoholic beverages rose by 5.0% in the year to February 2024, down from 6.9% in January.

The February figure is the lowest annual rate since January 2022.

The ONS reports that the annual rates for most types of food product eased between January and February 2024, with the largest effect coming from bread and cereals.

It says:

Overall, prices for bread and cereals rose by 0.3% on the month, compared with a rise of 2.3% between January and February 2023. Prices of packs of cakes and some bread products (for example, white sliced loaves) fell between January and February this year but rose a year ago. The resulting annual rate for bread and cereals in February 2024 was 6.0%, the lowest observed since March 2022.

Other smaller downward effects came from classes such as meat, vegetables, and milk, cheese and eggs. Overall, the annual rate eased in 10 of the 11 food and non-alcoholic beverages classes with oils and fats the exception; its annual rate rising from 8.0% in January to 8.3% in February 2024.

Underlying inflation also eased in February.

Core CPI (which excludes energy, food, alcohol and tobacco) rose by 4.5% in the 12 months to February 2024, down from 5.1% in January.

Goods inflation slowed from 1.8% to 1.1%, while the CPI services annual rate eased from 6.5% to 6.1%.

Newsflash: UK inflation has fallen to its lowest level in two and a half years.

The Consumer Price Index has slowed to 3.4% in February, down from January’s 4%, a sign that prices rose at a slower rate last month.

That’s the lowest since September 2021, and a slightly larger fall than the City expected, data from the Office for National Statistics shows.

Good morning.

Eyes in the City of London, and Westminster, are on UK inflation, with the latest cost of living data due at 7am this morning.

Inflation is expected to have slowed last month; economists estimate the Consumer Price Index (CPI) will drop to 3.5% for February.

That would be the lowest in almost two-and-a-half years (since September 2021), and mean prices are rising at a slower rate than January, when annual inflation was 4%.

A drop in inflation could encourage the Bank of England to consider cutting interest rates in the coming months – as its mandate is to keep inflation sustainably at 2%.

Kyle Rodda, senior financial market analyst at capital.com, explains:

UK inflation data will be a precursor to tomorrow’s Bank of England meeting, with forecasters projecting a meaningful drop in prices last month.

Core inflation is expected to moderate to 4.6% from 5.1% in February, while headline is tipped to decline to 3.5% from 4%. Inflation in the UK has been more stubborn than other G10 economies, partly due to elevated wage growth and energy price shocks.

The dynamic means the markets are pricing in relatively fewer cuts from the Bank of England than other major central banks.

The government will also be hoping for a substantial drop in inflation, as it would bolster Rishi Sunak’s claim that “the economy is turning a corner”, after it fell into recession at the end of last year.

The agenda

• 7am GMT: UK inflation report for February

• 9.30am GMT: UK house price and rental index for January

• 10.15am GMT: UK bank bosses to face questions from Treasury Committe

• 11am GMT: US mortgage applications data

• 3pm GMT: Eurozone consumer confidence report

• 6pm GMT: US Federal Reserve sets interest rates