The annual rate of inflation in Britain eased from a four year high last month as retailers cut prices to lure more customers in the run up to Christmas The government's preferred measure of inflation, RPI-X (retail prices excluding mortgage interest payments) rose 0.1pc in December from November and was up 2.7pc on a year-on-year basis, National Statistics (NS) said this morning. The statistics office said that single largest contributor to the upward effect on the retail price index was mortgage costs, while the largest downward effect came from food, and clothing and footwear. "Prices of clothing and footwear, particularly women's outerwear, fell by more this December than last due to more widespread sales and special offers," NS said The 2.7pc annual rate marks a decrease from the four year high of 2.8pc recorded in November, although it means that inflation remains above the 2.5pc government target for the second straight month. In a speech to bankers in Scotland last night, Bank of England governor Eddie George said that inflation is not a problem in the UK. //www.fxcentre.com