Sir Merv gets a breather as inflation remains at 4.5%

The Office for National Statistics (ONS) said Consumer Prices Index (CPI) inflation held steady at 4.5% last month, with rising food and drink prices offset by a decline in travel fares. Its wider RPI reading was also unchanged at 5.2%, with the data bringing some relief to consumers faced with soaring prices. King has warned previously that inflation could hit 5% in the short term, although he expects it to dissipate next year. The reading has been above the bank's 2% target since late 2009.