Homeowners will breathe a sigh of relief today as the inflation rate markedly dipped, lessening the prospect of a further increase in interest rates next month.
Figures from the Office for National Statistics show that consumer prices dropped to 2.7 per cent for the month, 0.8 percentage points down on January.
This works out as the highest fall in price increases for four years, demonstrating that the Bank of England's three price increases since August last year are finally beginning to have some impact.
In January, Nationwide reported that the housing market slowed somewhat, rising by just 0.3 per cent compared to 1.2 per cent in December as buyers were warded off by the climate of rising mortgage repayments.
Howard Archer, an economist at Global Insight, said: "This is a much more benign set of inflation data than expected, which will be of major relief to the Bank of England."
The Retail Price Index, which also includes mortgage lending and wage negotiations, also fell this month from 4.4 per cent to 4.2 per cent.
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