Inflation remains unchanged

15-Jan-2008

Inflation remained unchanged last month, according to official figures.

The Consumer Prices Index (CPI) stayed at 2.1 per cent in December, slightly above the Bank of England's target, but still within range.

Food prices showed the biggest increase, which is bad news for hard-pressed homeowners.

Utility bills fell, but with oil at record highs, energy prices are likely to remain a concern for individuals and the Bank of England in the short to medium-term.

Inflationary pressure could convince the bank's monetary policy committee (MPC) to put off another interest rate cut.

That would be a blow to first-time buyers, who will be hoping for lower interest rates to make mortgages more affordable.

With thousands of people keen to buy their first property this year, despite concerns about the wider economy, inflation is likely to remain under close scrutiny.

The Retail Price Index (RPI), which some argue is a much more accurate measure of inflation, fell last month from 4.3 per cent to four per cent.

MPC opts for holdCredit squeeze hits mortgage lending


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