The door was slammed shut on an interest rate cut next month when it was revealed the headline annual rate of inflation jumped to 3.4% in December.
The rise, from 3.2% in November was slightly higher than expected in the City and was largely blamed on a hike in tobacco duties that came into force at the end of November at the time of the later than usual Autumn Budget. The annual rate of inflation for tobacco products leaped from 4.2% to 6.5%.
