THE underlying rate of inflation fell 0.4 per cent last month to 2.2 per cent, said the Office for National Statistics.

The headline rate, which includes mortgage interest payments, fell 0.3 per cent to one per cent.

ONS said the biggest effect was smaller price increases in women's clothes. The January sales had seen less discounting than last year, so price rises after the sales were smaller than last year.

Other factors were the changes in house depreciation costs - a measure of the cost of maintaining a house in its current condition. This fell in February, in contrast to an increase a year ago.

Tobacco prices stayed static, as did CD prices.

However, upward pressure on inflation included telephone charges, which increased in contrast to a fall last year - when sales of discount packages for landline telephones were higher.

January's large increase in the rate of inflation had been partly due to higher petrol and seasonal food prices, as well as discounting in the New Year being shallower than the previous year.

The inflation figures came in below City expectations.

David Page, economist at Investec bank, said: "2.2 per cent was surprisingly benign."

He was pencilling in a quarter point rise in interest rates in June, or possibly July. Interest rates are currently at four per cent.

John Butler, economist at HSBC, said: "Going forward, despite this good number, we expect that inflation will stay between two and 2.6 per cent over the remainder of this year and is unlikely to trough at the 1.6 per cent predicted by the Bank of England's Monetary Policy Committee in their previous Inflation Report."