Food prices across the world’s richest nations rose in February at the slowest rate since before the Russian invasion of Ukraine, according to figures that show easing inflationary pressures on households.
The Organisation for Economic Co-operation and Development (OECD) said food inflation declined for the 15th consecutive month across its 38 member countries from 6.3% in January to 5.3% in February.
The overall measure of inflation, the consumer prices index, was stable at 5.7%, the OECD said, despite falls in three-quarters of member states.
It said the largest monthly declines were in Poland and Sweden, while inflation was below 2% in seven OECD countries and remained negative in Costa Rica.
However, Turkey was among a group of countries to suffer a rapid rise in food inflation, mainly linked to a decline in the local currency pushing up the cost of imports.
A decline in the value of its currency, the lira, also meant a sharp rise in energy prices, an issue that also affected the newest member of the OECD, Columbia.
The OECD has 38 members, including the UK, US, most big European nations, Mexico, Chile and Israel.
In the UK, prices for food and non-alcoholic beverages were slightly below the OECD average, rising by 5% in the year to February. This rise was the lowest since the start of 2022 and below the 45-year high of 19.2% in March 2023.
OECD core inflation, which excludes food and energy prices, continued to decline but remained high at 6.4%, reflecting sticky services prices.
Inflation fell more sharply in the eurozone and in the US, where growth in energy and food prices has cooled dramatically.
The harmonised index of consumer prices in the eurozone, which is used to compare inflation across different nations, declined to 2.6% in February compared with 2.8% in January.
Analysts forecast that central banks will make several interest rate cuts this year in response to falling inflation, but have become more cautious in recent weeks about the extent of any reductions.
Wage growth has remained elevated in many countries, including the UK, and Brent crude oil prices have risen towards $90 (£71) a barrel, increasing the cost of fuel for consumers.
Andrzej Szczepaniak, an economist at Nomura, said he did not expect eurozone services inflation to fall sufficiently before the European Central Bank’s June meeting to allow policymakers to begin cutting rates.
“We think structurally less labour supply, and increased demand in the labour-intensive services sector, will likely result in services inflationary pressures remaining somewhat more elevated over the medium term,” he added.
Szczepaniak said the cross-currents from declining food inflation, while services cost increases remain persistent, was confusing policymakers.
“Disagreement about the medium-term path for euro area inflation has never been higher according to analysis presented at the ECB’s survey of professional forecasters conference,” he said.
The OECD said in the countries covered by the G20, which includes Saudi Arabia and Brazil, year-on-year inflation rose to 6.9% in February compared with 6.4% in January, reaching its highest level since March 2023.
“This rise was driven partly by an increase in headline inflation in China, which turned positive for the first time since August 2023. Headline inflation also increased in Saudi Arabia and Indonesia and jumped even further in Argentina. It was broadly stable in Brazil and South Africa,” the OECD added.
