UK Inflation Remains Unchanged In December

Britain’s annual rate of inflation remained static in December, defying expectations that it would fall, according to the latest figures from the Office of National Statistics.

The Chancellor of the Exchequer’s new measure of inflation, the Consumer Price Index, held firm on November’s figure of 1.3%, which is well below the Bank of England’s new inflation target of 2%.

However, it is understood that the unchanged figure could make it easier for the Bank to raise interest rates next month. Analysts had expected the CPI to fall back to 1.2%, which would have made it more difficult for Britain’s central bank to increase the cost of borrowing.

The UK’s previously targeted underlying rate of inflation, the Retail Price Index, rose to 2.6% in December, up from 2.5% in the previous month.

The headline RPI rate, which includes mortgage interest payments, rose to 2.8% during the same period, up from 2.5%. The all items Retail Prices Index for September 2003 was 183.5.

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