Samuel Tombs, an analyst at Capital Economics, said inflation looked set to hover between 2.5% and 3% for the best part of the next year, as further increases in utility and food prices kick in.
With annual growth in average earnings at 1.3% in October, it means the squeeze on households' spending power will persist throughout 2013. But Mr Tombs added:
We have not lost faith in our view that the large amount of spare capacity in the economy will mean that inflation will eventually fall to a very low rate.
More top news
Socialite Tara Palmer-Tomkinson has been cautioned by police after a 'disturbance' at Heathrow Airport.
The NHS is to set up 11 centres to unlock the secrets of DNA and help develop tests and drugs to target cancer and rare genetic diseases.
Australian businessman named as Alan Sugar's newest apprentice and winner of a £250,000 investment in his fledgling company.