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| UK inflation holds steady at 2.7% | UK inflation holds steady at 2.7% |
| (35 minutes later) | |
| UK consumer prices inflation held steady at 2.7% in December, official figures have shown. | UK consumer prices inflation held steady at 2.7% in December, official figures have shown. |
| A rise in electricity and gas prices was offset somewhat by a fall in fuel costs and air transport, the href="http://www.ons.gov.uk/ons/dcp171778_294429.pdf" >Office for National Statistics (ONS) said. | |
| The CPI rate of inflation has remained been above the Bank of England's 2% target since November 2009. | The CPI rate of inflation has remained been above the Bank of England's 2% target since November 2009. |
| Retail prices index (RPI) inflation, which includes housing costs, edged up to 3.1% last month from 3% in November. | Retail prices index (RPI) inflation, which includes housing costs, edged up to 3.1% last month from 3% in November. |
| The figures were broadly in line with analysts' expectations. It was the third month in a row that the CPI rate has come in at 2.7%. | |
| Weak economy | |
| Phil Gooding from the ONS told the BBC: "By far the largest upward effect comes from domestic gas and electricity. Here we saw the majority of the pre-announced price increases coming into the index for December." | |
| Electricity prices were up 3.9% compared with December 2011, while gas prices were 5.2% higher. Prices of food and non-alcoholic drinks rose 3.8%. | |
| However, motor fuel costs fell 0.2% while air transport dropped by 6.8%. | |
| Sarah Hewin, head of research at Standard Chartered, told the BBC that she was optimistic that the rate of inflation would start to fall. | Sarah Hewin, head of research at Standard Chartered, told the BBC that she was optimistic that the rate of inflation would start to fall. |
| "The outlook I think is probably for inflation falling, rather than inflation rising," she said. | "The outlook I think is probably for inflation falling, rather than inflation rising," she said. |
| "Unfortunately the backdrop is that the economy is continuing to struggle. We've had some pretty poor data out recently and that in turn will dampen inflation pressures." | "Unfortunately the backdrop is that the economy is continuing to struggle. We've had some pretty poor data out recently and that in turn will dampen inflation pressures." |
| A Treasury spokeswoman pointed out that inflation was nearly half of its 5.2% peak and that the government had taken action to help households with the cost of living, including a further increase in the tax-free personal allowance and cancelling the fuel duty increase that was planned for this month. |