ONS figures could herald more rate cuts

The Bank of England may be more favourably inclined towards further interest rate cuts in the new year following the publication of the latest inflation data, according to some analysts.

The Office of National Statistics (ONS) has revealed that inflation stood at 2.1 per cent in November, the same figure as had been seen in October.

The consumer price index figure is above the Bank of England's two per cent target but below market expectations of a jump to 2.2 per cent.

"November's UK consumer prices figures confirm that the UK is suffering relatively lightly from the latest rise in oil and energy prices," said Capital Economics.

"The November inflation data brought some welcome festive cheer for the Bank of England […] it is highly possible that interest rates could move below five per cent in the second half of 2008.

Interest rates hard been raised five times between August 2006 and July 2007 prior to the cut to 5.5 per cent earlier this month.

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