Inflation Hits Bank Of England

of 2%

Pressure eases on Bank governor Mark Carney to begin raising the base rate of interest as inflation hits its target mark.

When housing costs were included, the RPI measure of inflation rose to 2.7% in December from 2.6% the previous month.

Annual inflation has exceeded the Bank's 2% target every month since December 2009, eroding the spending power of households who have seen wage growth either largely remaining stagnant or rise at a substantially lower rate.

But the sixth successive monthly drop in inflation eases pressure on the Bank of England - which would have to reconsider its flagship low interest rate policies should inflation look likely to spiral out of control.

As things stand, the Bank will only consider the possibility of raising borrowing costs when the jobless rate falls to 7%.

The return to the 2% inflation target was welcomed by Prime Minister David Cameron who tweeted: "It's welcome news that inflation is down and on target. As the economy grows and jobs are created this means more security for hard-working people."