"Inflation could pick up a bit further in the near-term, quite possibly reaching 3 per cent"
- Vicky Redwood, an economist at Capital Economics
The inflation rate in the U.K. remained unchanged around its highest rate since May in December, as increases in gas and electricity bills pushed consumer prices above the Bank of England's target. Britain's consumer prices rose 2.7% from a year earlier, unchanged from October and November, while on a monthly basis they gained 0.5%. In the meantime, the inflation rate remains above the BoE's 2% target since November 2009. Electricity prices were up 3.9% compared with a previous year, while gas and food prices added 5.2% and 3.8%, respectively.
"Inflation could pick up a bit further in the near-term, quite possibly reaching 3 per cent," said Vicky Redwood, an economist at Capital Economics in London. "It will probably stay relatively high for most of this year, prompting households' real pay to fall again in 2013. But we continue to expect inflation to fall back below its target towards the end of the year."
"We expect consumer price inflation to hover around 3.0% during the first half of 2013, before falling back later in the year," said Howard Archer, chief U.K. and euro zone economist for IHS Global Insight.
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