LONDON (AP) -- Britain's consumer price inflation fell a half point in February to 3 percent, but remained well above the government's annual target of 2 percent, the Office for National Statistics said Tuesday.
The agency said the price of toys, computer games and gas dropped, while the main increases came from clothing and footwear.
The retail prices index, the broadest measure of inflation, was unchanged at 3.7 percent. Retail price inflation excluding mortgage payments was up 4.2 percent, down from 4.6 percent in January.
Inflation had been expected to rise in the early part of the year as the government ended a temporary cut in the value-added tax to 15 percent. The broadly based tax on sales is now back at 17.5 percent.
Retailers also were slashing prices a year ago but there has been less discounting this year, analysts say.
Howard Archer, economist at IHS Global Insight, said the drop in the consumer price index was sharper than expected, and might ease concerns of some members of the Bank of England's rate-setting panel that inflation has become a problem.
Consumer prices excluding tax effects rose by 1.4 percent on an annual basis in February, down from 1.9 percent in January and 2.8 percent in December.
"Looking ahead, inflation may stay close to current levels over the next few months ... but it should fall back sharply later this year and in 2011 as the vast amount of spare capacity in the economy keeps core price pressures subdued," said Jonathan Loynes, economist at Capital Economics.