INFLATION has stayed at 3% in the UK – but experts have warned of “impending doom” as the Iran war is priced in next month.
The Consumer Prices Index (CPI) rose by 3% in the 12 months to February 2026, unchanged from the 12 months to January, Office for National Statistics (ONS) figures showed.
On a monthly basis, CPI rose by 0.4% in February 2026, the same rate as in February 2025.
The ONS said the price of clothing was the main driver of inflation staying at 3%.
But it did point out that these figures are before the Iran war started – so next month’s figures will price in rising petrol costs.
The Bank of England held its base rate at 3.75% in anticipation of inflation rising.
Grant Fitzner, Chief Economist, ONS, said: “After last month’s slowdown, annual inflation was unchanged. The largest upwards driver was the price of clothing, which rose this month but fell a year ago. This was offset by falls in petrol costs, with prices collected before the start of the conflict in the Middle East and subsequent rise in crude oil prices.
“A fall in the cost of alcoholic drinks due to promotional activity, compared with a rise last year, was also a downward driver, while little change in food prices, again compared with a small rise this time last year, added further downward pressure.”
This is simply the quiet before the storm
Experts said the elephant in the room was the Iran war which is now expected to cause inflation to tick up again in the UK.
The war is raging on in the Middle East with no sign of abating, as much as US President Donald Trump insists Iran wants a deal “so badly”.
Petrol prices are now over 144p a litre – up 12p since the start of the war on 28 February.
Ben Perks, Managing Director at Orchard Financial Advisers, said next month will see “Trumpflation” come to the UK.
He added: “This is simply the quiet before the storm. It doesn’t take into account the impending doom that’s incoming in the form of war-fuelled inflation. The CPI data is pre-Iran conflict and Trumpflation hadn’t taken hold of the UK when this data was being collated.
“As prices climb over the coming weeks and months I’d expect to see a sharp rise in the figures in the next set of data. Just a month ago, Andrew Bailey was hopeful of a return to 2% inflation, now, we are staring down the barrel of the cost of living crisis 2.0.”
Craig Fish, Director at Lodestone Mortgages, said “the Bank of England is stuck between a rock and a hard place”.
He continued: “February’s inflation figures came in as expected at 3%, but that’s almost irrelevant now. These numbers predate the conflict in the Middle East, and the Bank of England has already flagged CPI could climb toward 3.5% by Q3.
“Core at 3.2% shows underlying pressure isn’t going anywhere either. The 2% target feels like a distant memory right now. Rate cuts? Don’t hold your breath. With swap rates jittery and global uncertainty ratcheting up, the Bank of England is stuck between a rock and a hard place.
“Do they hold and risk choking the economy or cut and risk reigniting inflation? Mortgage holders hoping for relief in 2026 need to plan for rates staying higher for longer than anyone wanted.”
It doesn’t take into account the impending doom
Rohit Kohli, Director at The Mortgage Stop, said inflation is proving sticky – even without the Iran war feeding into the figures next month.
He added: “This inflation figure is already out of date. The ONS collected prices before the Middle East war broke out. In short, the oil price spike and market jitters are invisible, at least for now. Worryingly, core inflation actually rose, while services inflation is still sticky at 4.3%.
“The Bank of England held its rates last week because they saw this coming. First-time buyers and anyone rolling off a fix need to stop waiting for the right moment, as it may not come.”
Emma Jones, Managing Director at Whenthebanksaysno.co.uk, said inflation will head north next month.
She added: “This inflation data won’t age well at all. It’s yet to feature the impact of the war in the Middle East, which is feeding inflation into the economy at pace. Expect the numbers in the months ahead to show inflation heading north again.”
Riz Malik, Independent Financial Adviser at R3 Wealth, said an “inflationary hand grenade” is on its way to the UK.
He continued: “We were heading towards Eldorado before Trump released an inflationary hand grenade when he started this war with Iran and drove up energy costs. We are far away from Kansas now, Dorothy.”
