Inflation sticky at 2.7% in November
The Office for National Statistics said CPI was subject to both “significant upward and downward pressures” between October and November.
Food, non-alcoholic beverages, gas and electricity prices exhibited the most upwards pressure on the headline rate, with falling fuel prices among the largest downwards pressures.
The data means CPI inflation remains in excess of its 2% target, and policymakers are beginning to broach the possibility of the threshold being scrapped or modified in future.
Incoming Bank of England governor Mark Carney suggested earlier this month that it could be beneficial for central banks to target nominal GDP (a mixture of GDP and inflation rates) rather than simply focusing on price stability.
M&G head of retail fixed income Jim Leaviss has said the changing debate is evidence of a concerted “central bank regime change”.
Sterling strengthened slightly to $1.6216 against the dollar on the latest inflation figures, towards the top end of its 2012 range.
The currency has strengthened against the dollar in recent days as the Federal Reserve unveils more easing measures and the Bank of England is seen as being more reticent to ease.
RBS analysts have said this month that betting on a fall in the GBP/USD exchange rate is one of their top trades of 2013, anticipating that the UK’s deteriorating fiscal position will put pressure on the pound.