The annual rate of inflation in Britain remained unchanged in the first month of 2003 as stores discounted less heavily that expected after Christmas. The government's preferred measure of inflation, RPI-X (retail prices excluding mortgage interest payments) declined 0.1pc in January from December, but held at 2.7pc on a year-on-year basis, National Statistics (NS) said this morning. This is the third straight months that inflation has remained above the 2.5pc government target.
In December, RPI-X eased to 2.7pc from a four year high of 2.8pc, as stores cut prices to lure more customers in the run up to Christmas. Overall retail prices also declined by 0.1pc in January from December, but were up 2.9pc from a year earlier. In a surprise revelation, NS revealed that the largest upward effect on the all items twelve-month rate came from clothing and footwear. "Prices of women's outerwear, children's outerwear and footwear fell this January by less than last year. This follows the earlier onset of the sales period this year, with greater discounting in December than a year previously," it said. ///www.fxcentre.com