The prospects of the Bank of England being dissuaded from cutting interest rates by an increase in inflationary pressures may have receded after official figures showed Consumer Prices Index (CPI) inflation was unchanged last month.
Office for National Statistics (ONS) data released today showed the December 2007 CPI rate unchanged from November at 2.1 per cent, 0.1 per cent above the government's target.
The BBC stated that this would not put the Bank of England off making a further cut in the base rate next month, which could help reduce mortgage rates for both residential and commercial property.
Food prices were the main upward influence on inflation but were countered by lowering utility bills and furniture prices, the ONS stated.
However, it warned utility bills were on the up.
This factor, however, was cited by the Bank of England in its November inflation report as one of the influences which would raise inflation in 2008, despite which it predicted that even with rate cuts the CPI rate would ease back to its target by 2009.
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