Hong Kong prices fell at the fastest rate in months in February as consumers cut back on spending after the Lunar New Year, the government said yesterday. The composite consumer price index, which measures the cost of a basket of goods and services, fell 2 per cent in February compared with the same month last year. It was the 52nd consecutive month of deflation and the biggest drop since November. Waivers on electricity, gas and water charges, falling housing rentals, lower transport costs and cheaper package tours also dragged down prices. The consumer price index fell at an annual rate of 1.6 per cent in January and 1.5 per cent in December. Economists expect deflation to persist because the main factors - a property slump, cheaper prices on the mainland and belt-tightening among consumers - are still in place. 'The trend is fairly clear,' said Mike Moran, an economist at Standard Chartered Bank. 'The consumer remains very cautious. Businesses are having trouble raising prices as demand is still very price-sensitive.' Ben Simpfendorfer, an economist at JP Morgan Chase, said: 'There's been no change to housing, no change to food. What we're getting here [from falling utility, transport and durable goods costs] is noise. The noise signals a weak domestic environment, and it'll get worse from here.' The government said February's faster price decline could be blamed partly on the timing of the Lunar New Year holidays, which are usually preceded by higher prices.