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UK inflation holds steady at 2.1% UK inflation holds steady at 2.1%
(about 1 hour later)
UK inflation remained unchanged in November as lower utility bills offset higher petrol prices.UK inflation remained unchanged in November as lower utility bills offset higher petrol prices.
Official figures showed the annual rate of CPI inflation was unchanged at 2.1% last month, just above the government's target of 2%.Official figures showed the annual rate of CPI inflation was unchanged at 2.1% last month, just above the government's target of 2%.
Observers say the data could give the Bank of England more opportunity to cut UK interest rates further.Observers say the data could give the Bank of England more opportunity to cut UK interest rates further.
The RPI inflation measure, on which many pay deals are based, rose to 4.3% from 4.2% in October.The RPI inflation measure, on which many pay deals are based, rose to 4.3% from 4.2% in October.
The Bank of England's Monetary Policy Committee reduced interest rates to 5.5% from 5.75% earlier this month, with analysts predicting more cuts if the economy shows more signs of weakening.The Bank of England's Monetary Policy Committee reduced interest rates to 5.5% from 5.75% earlier this month, with analysts predicting more cuts if the economy shows more signs of weakening.
Cheaper vegetablesCheaper vegetables
The inflation rate remained steady despite the average price of unleaded petrol breaking through the £1-a-litre barrier on the back of higher oil costs.The inflation rate remained steady despite the average price of unleaded petrol breaking through the £1-a-litre barrier on the back of higher oil costs.
November's lower than-expected inflation data keeps the door open for another interest rate cut early in 2008 Howard Archer, Global Insight
However, the size of gas and electricity bills continued to fall after 2006's large price increases.However, the size of gas and electricity bills continued to fall after 2006's large price increases.
The Office for National Statistics said gas and electricity bills were falling at an annual rate of 5.6%, the steepest fall since records began.The Office for National Statistics said gas and electricity bills were falling at an annual rate of 5.6%, the steepest fall since records began.
Analysts had expected food to have pushed inflation higher after a surge in the price of cakes and bread drove the annual rate of food inflation to a 14-year high in October.Analysts had expected food to have pushed inflation higher after a surge in the price of cakes and bread drove the annual rate of food inflation to a 14-year high in October.
However, the ONS said that increases in the price of items such as bread and milk had been offset by falling vegetable prices.However, the ONS said that increases in the price of items such as bread and milk had been offset by falling vegetable prices.
"November's lower than-expected inflation data keeps the door open for another interest rate cut early in 2008," said Howard Archer, chief UK economist at Global Insight.
"Nevertheless, significant price risks persist and inflation still seems set to rise further over the coming months," he added.
"Much will depend on to what extent economic activity appears to be slowing, whether or not pay moderation continues in the early 2008 wage rounds, and whether companies' pricing power appears to be waning."