If you are loosing inches, you're loosing fat. It's better to divorced ourselves from the notion that we want to loose weight. We don't, we want to loose fat and size and become lean and healthy. Weight includes everything. It's water, it's what is in your stomach or intestine; it's fat, it's muscle.
I know how discouraging the scale might be, so it's better not to rely on the scale as a measure of progress except over the long haul. A much more reliable measure is your volume and 2 inches is a lot!
It's also possible to gain muscle just by adding protein if your diet has been deficient in it. In a given week you might have lost pounds of fat, gain in muscle, retained water and the scale shows the same weight or even a gain!
Hang in there! Loosing inches means that you're doing well!
Cheers, Isiar