Britain's annual inflation rate remained steady in December to defy expectations of a fall and make it easier for the Bank of England (BoE) to raise interest rates next month.
The Office for National Statistics said this morning that consumer prices rose by 0.4 per cent on the month, leaving the index 1.3 per cent higher than a year earlier.
This remains well below the BoE's government-set target of 2 per cent but analysts had expected the inflation rate to fall back even further to 1.2 per cent, which would have made it harder for the central bank to lift rates next month.
The BoE last lifted borrowing costs in November, and most analysts expect it to do so by another quarter-point to 4 per cent in February, though the generally low level of targeted inflation and a rise in the pound has thrown some doubt on the matter.
As expected, the biggest downward effect on inflation last month came from airfares which did not repeat their 50 per cent rise seen a year earlier.
The slower rise in airfares pushed annual inflation in services to just 2.8 per cent, its lowest level since comparable records began in 1997. Good prices were falling at a rate of 0.1 per cent in December.