The underlying inflation rate in the UK held steady at 3% in April, defying expectations, as falls in oil prices balanced increases in council taxes.
According to figures released this morning from the UK Office for National Statistics, the headline rate of inflation, which unlike the underlying rate includes mortgage interest payments, stayed unchanged at 3.1%. RPIX, or the retail price index, which does not count home loan payments, rose by 0.7% on the month.
The steady rate contradicts expectations for a further rise above the BoE's government-set 2.5% target and left policymakers room to ease borrowing costs again if the economy fails to pick up in coming months.
The data contained good news on services for the inflation-conscious central bank as sector price increases, which had run at close to 5% for some time, slowed to 4.2%, the most sluggish pace since December 2001.
