Inflation stats boost rate cut hopes

UK inflation remained unchanged at 2.1% in December despite rising food and fuel prices, figures from the Office for National Statistics have revealed.

The move will be welcome news for the Bank of England, which has been concerned that inflation could rise still further above its target rate of 2.0%, and makes an interest rate cut next month more likely.

The Retail Price Index, which includes mortgage and rent payments, suggested inflation had fallen from 4.3% in November to 4.0% last month.

A cut in interest rates could ease the jitters that have affected the UK economy since the global credit crunch and could boost both borrowers and consumers.