January 15, 2013 / 9:30 AM / 5 years ago

UK inflation stays highest since May as utility bills rise

LONDON, Jan 15 (Reuters) - British inflation held at 2.7 percent for the third month running in December, in line with forecast as a rise in gas and electricity bills was curbed by falls in fuel costs.

The Office for National Statistics said utility prices rose 3.9 percent on the year while fuel costs fell by 0.2 percent.

Stubborn inflation, above the Bank of England's 2 percent target since November 2009, is likely to have been a key argument against more quantitative easing to support growth at the bank's monthly policy meeting last week.

High inflation has also put pressure on consumer spending, which accounts for around two thirds of all expenditure in a British economy that is still struggling to fend off recession.

The central bank's latest quarterly forecasts, released in November, showed that inflation would peak in the third quarter of 2013, falling below the target only a year later.

According to separate data published by the ONS on Tuesday, annual factory-gate inflation inched up to 2.2 percent in December from 2.1 percent in November.

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