Inflation still stuck at 2.7 per cent

Inflation was stuck at 2.7 per cent last month as air fares offset falling petrol costs, the Office for National Statistcs said yesterday.

Air fares usually fall in September after the summer, but they fell less steeply last month than a year earlier when airlines hiked prices for the Olympics. Petrol prices dropped 0.5p a litre last month against a 3.9p rise a year ago.

The consumer prices index has been above the Bank of England's 2 per cent target since November 2009, although annual factory gate price inflation fell to 1.2 per cent in September, fuelling hopes of easing inflation pressure ahead.