UK inflation sticks at 2.7 percent for 3rd month in Dec
British inflation held at 2.7 percent for the third month running in December, while producer prices dipped below forecast as a rise in utility bills was offset by lower fuel costs.
Some analysts had feared a higher headline inflation number and financial markets on Tuesday took the figures as modestly reassuring for British consumers and for policymakers struggling to fend off recession.
But the numbers were unlikely to make it any easier for the Bank of England to push ahead with more moves to stimulate growth.
The FTSE 100 share index ticked higher, having been flat, while the pound hit a session high against the dollar before trimming those gains.
"It's a relatively good number. If you look at the core (inflation) as well that's down to 2.4 percent," said Deutsche Bank economist George Buckley.
"It's still too high. It needs to come down further obviously," Buckley said, suggesting slack in the economy could help bring down inflation over the course of the next year. "But for the moment it's remained sticky."
The Office for National Statistics said utility prices rose 3.9 percent on the year while fuel costs fell by 0.2 percent. It said the biggest downward pressure on the index came from a fall in transport costs as airlines cut fares.
Prices at the factory gates rose 2.2 percent on the year, below a Reuters poll forecast of 2.4 percent.
Stubborn inflation, above the Bank of England's 2 percent target since November 2009, is likely to have been a key argument against more
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