Inflation rate unchanged at 2.7%

The rate of consumer price index inflation remained unchanged at 2.7% in November, official figures showed.

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Household spending squeeze tipped to continue in 2013

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.

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