As long as the knife is less than 7.62cm (3inch) and folds away but does not lock, then you can carry a knife as a routine with absolutely no valid reason (i.e. simply saying "it comes in handy on occasion" is a perfectly reasonable and legal response, it doesn't have to be "fisherman", "chef" or anything specific).

So a multi-tool, as long as it meets the criteria, on your belt is fine as long as you aren't obviously going around being a twat with it.

Of course if you get that knife out to attack someone, or even in self defense, you will have issues, and if the police have a suspicion you've used the knife for that you're going to have an issue. But simply having a small knife attached to your belt in public without a specific reason... that's fine.

The police.uk website has very clear guidelines on this, and even uses a Swiss Army knife (multi-tool) as an example (emphasis is my own)

It is illegal to:

• carry a knife in public without good reason - unless it’s a knife with a folding blade 3 inches long (7.62 cm) or less, e.g. a Swiss Army knife

So I kind of feel the new police officer fella was a bit heavy handed saying no matter where it is it's an issue, seeing as the location of the knife itself is irrelevant as long as it meets the 7.62cm non-locking but folding knife rules.