By Marcus Leach

The Office for National Statistics (ONS) have released data confirming that the headline rate of inflation remained static at 2.7% in December.

Electricity and gas prices rose by 3.9% but this was offset somewhat by a 0.2% fall in fuel costs, official figures revealed.

The consumer price index (CPI) rate of inflation has remained been above the Bank of England's 2% target since November 2009.

Retail prices index (RPI) inflation, which includes housing costs, edged up to 3.1% last month from 3% in November.

“While this figure suggests that inflation has stabilised within the target range, we expect this to be last reading for a while that sees CPI below the 3.0% level," Jeremy Cook, chief economist at foreign exchange company, World First, said.

“While the Bank of England's asset purchase program isn't in itself inflationary, the devaluation of sterling is. Our largest import through 2013, because of the Bank's monetary policy, will be inflation.

“Home-grown price pressures are also increasing with transport, food and utilities boosting upwards in the latter part of 2012; this will continue to erode wage value through 2013, hurting consumer confidence and limiting spending.”

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