Britain’s inflation rate unexpectedly remained unchanged for the fourth consecutive month in January, holding at its highest level since May, Reuters reports.
The Office for National Statistics said that annual consumer price inflation held at 2.7%, slightly below the median forecast in a Reuters poll of economists for a tick-up to 2.8%.
This was the first time inflation remained unchanged for four months in a row since records began in 1996, the ONS said.
The biggest upward contribution to the annual rate came from an 8.5% rise in the prices of alcohol and tobacco, while the main downward pressures came from slower increases in the prices of miscellaneous goods and services, such as money transfer fees, as well as clothes and shoes.
Persistently high inflation has in the past few years restrained consumer spending – traditionally a key driver of economic growth in Britain – and limited the scope for asset purchases by the central bank, aimed at supporting the economy.
A let-up in the pressure on Britons’ budgets may still be some way off. The Bank of England warned last week that inflation might remain above its 2% target for the next two years. It will publish its latest quarterly economic forecasts on Wednesday.
Separate data released by the ONS showed that factory-gate inflation rose 2.0% on the year in January, the slowest since July. Input prices climbed 1.8%, the fastest since March last year.
Earlier this month, the British Retail Consortium found that shop prices inched up in January at their slowest annual pace in more than three years, driven by cheaper clothing and electrical goods.
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