13:55 13 February 2013
For the first time since 1996, the inflation rate in UK was unchanged for four consecutive months; it held at 2.7per cent as confirmed by the Office for National Statistics. This is due to higher prices of alcohol and tobacco. Disappointing economists who had been looking for a fall can also be blamed.
Retail Prices Index measure of inflation, on the other hand, increased to 3.3per cent in January from 3.1per cent in December. This includes housing costs, such as mortgage interest payments and council tax.
Meanwhile, the rising prices of alcohol and tobacco was by the far the biggest contribution to CPI. The prices of clothing and footwear on the other hand, dropped by 5.4per cent.
Food and drink prices have also increased as more produced was imported overseas.
Joost Beaumont, senior UK economist at ABN Amro, told The Telegraph: “The high inflation, low growth dilemma will probably once again be the main topic of the Bank’s Inflation Report on Wednesday. We expect the Bank to lift its inflation forecasts, while lowering its growth projections, at least in the near-term.”
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