The U.K.’s inflation rate fell slightly to 2.8% in February, coming in just below analyst expectations, according to data released by the Office for National Statistics (ONS) on Wednesday.

Economists polled by Reuters had anticipated the consumer price index would hit 2.9% in the twelve months to February.

The rate of inflation rose sharply to 3% in January, after falling to a lower-than-expected 2.5% in December.

The latest data will be food for thought for the Bank of England, which left interest rates at 4.5% at its monetary policy meeting last week, as the U.K. economy grapples with uncertainty around global trade policies, possible tariffs, a forecasted temporary rise in inflation and looming stagnation at home.

In a statement at the time, the central bank said “global trade policy uncertainty has intensified, and the United States has made a range of tariff announcements, to which some governments have responded.”

“Other geopolitical uncertainties have also increased and indicators of financial market volatility have risen globally,” it added.

The BOE had already warned in February that it expected inflation to temporarily rise to 3.7% in the third quarter of this year, as energy costs are set to accelerate. It also halved its 2025 growth forecast for the U.K. to 0.75%.

The inflation data will be closely watched by the British government as Finance Minister Rachel Reeves prepares to later on Wednesday update lawmakers on her spending and taxation plans, as well as the nation’s economic outlook.

Reeves is expected to announce billions of pounds worth of spending cuts as a way to close a budget shortfall caused by a rise in borrowing costs since her first fiscal plan released last fall.

The finance minister has already vowed to stick to her self-imposed “fiscal rules” to ensure that day-to-day spending is met by tax revenues and that public debt is falling as a share of economic output by 2029-30.

Reeves’ Spring Statement is due to be presented in Parliament around 12.30 p.m. London time, and will be delivered alongside the latest economic forecasts from the Office for Budget Responsibility (OBR), the country’s independent public finances watchdog.

The OBR is reportedly expected to downgrade the U.K.’s growth forecasts for 2025 and halve its previous 2% estimate, with lower output putting upward pressure on the government’s borrowing requirements and forcing Reeves to cut public spending by around £10 billion ($12.96 billion).