US inflation stabilizes

18 December 2006

US consumer price inflation (CPI) held firm in November at 2.2 per cent.

CPI had been expected to rise last month, but falling oil prices kept inflation at an annual rate of 2.2 per cent, compared with 3.4 per cent a year ago.

The figures will come as good news to the Federal Reserve, which has been trying to hold back inflation and stop the US economy from overheating. Many analysts have taken the data to show that the economy could be heading for a soft landing.

In Europe, inflation for the eurozone in November stood at 1.9 per cent, up from 1.6 per cent in October, taking pressure of the European Central Bank. Across all 25 members of the EU, inflation was at 2.1 per cent.

Meanwhile, UK CPI remains well above target, standing at 2.7 per cent, after steadily rising throughout 2006, despite two interest rate rises.

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