Britain's inflation rate was unchanged in February to defy expectations for a small rise as retailers did not mark up prices after the new year sales as much as a year ago.
The Office for National Statistics (ONS) said today consumer prices rose 0.3 per cent on the month, leaving the annual rate steady at 1.6 per cent, still below its 2 per cent target.
Analysts had on average predicted a rise to 1.7 per cent.
The figures are unlikely to settle a market debate over whether interest rates will rise one more time this year from their current 4.75 per cent.
Reflecting that lack of stronger pressure for a rate rise, the pound fell versus the dollar and the euro while short sterling futures and government bonds rose.
The ONS said the biggest upward effect came from transport, as fuel costs increased and airlines raised their fares on domestic and European routes, possibly in response to the soaring price of oil.
Household bills, such as gas and electricity, were also up at their sharpest pace since current records began in 1997.
Against this, however, retailers did not raise prices as much as they usually do after the new year sales, perhaps as there have been signs that consumer demand is faltering.
The ONS said February recoveries from sales for furniture and household equipment were not as strong as a year ago while there were reduced prices for toys and hobby-related items such as computer games.