Inflation in the UK has fallen to its lowest level since July last year, handing some relief to cash-squeezed households as the impact of the Brexit-hit pound starts to disappear.

Figures from the Office for National Statistics (ONS) show the Consumer Prices Index (CPI) cooled to 2.7% last month, down from 3% in January. 

The outcome was lower than the 2.8% predicted by economists and marked the first fall in inflation since December 2017. 

Sterling's slide since the Brexit vote has ratcheted up the pressure on household spending power, climbing from 0.6% shortly after the EU referendum result to a near six-year high of 3.1% in November 2017.

Slower growth from CPI eases the pressure on the Bank of England, which is widely expected to hike interest rates beyond 0.5% in May.

The ONS said that a small fall in petrol prices alongside food prices rising more slowly than last year helped pull down inflation, as many of the early 2017 price increases due to the previous depreciation of the pound have started to work through the system.

UK transport prices dragged on the cost of living in February, securing a smaller month-on-month rise of 0.5% in contrast to a 1.2% jump last year. 

Petrol prices dropped by 0.2 pence a litre to 120.8 pence a litre on the month, while diesel slipped by 0.1 pence a litre to 124.4 pence. 

UK food prices were also applying downward pressure, lifting 0.1% between January and February in contrast to a 0.8% rise the year before. 

The fall in food price growth was partly down to a shortage of salad and vegetables last year when bad weather hit crops in southern Mediterranean countries, the ONS said.

The main upward pressure on the cost of living came from clothing and footwear prices, which rose by 1.7% on the month - compared to 1.2% in 2017 - as women's shoes became more expensive.

Economists and the Bank of England believe inflation's upward march has run its course and will start to unwind in 2018. 

The Bank of England is expected to keep interest rates on hold at 0.5% on Thursday, but the meeting will be watched closely amid expectations over another hike in May.

Governor Mark Carney has already warned borrowers that rates will need to rise "somewhat earlier and by a somewhat greater degree" to get inflation back to the bank's 2% target after stronger-than-expected economic growth. 

The Office for Budget Responsibility (OBR) hiked its outlook for economic growth this year to 1.5% from 1.4% in its Spring Statement forecasts.