UK inflation holds at 2.8%

<p>Inflation in the UK remains above target.</p>

The UK's headline rate of inflation has stayed at 2.8 per cent, remaining well above the two per cent set by the government.

Data released by the Office for National Statistics (ONS) today (April 16th) showed lower inflation for petrol and diesel helped to cancel out increases in the cost of books, digital cameras and car insurance.

David Tinsley, economist at BNP Paribas, told BBC News that the inflation figures were broadly in line with his expectations.

"But nonetheless inflation remains above target and it's going to take a number of years to bring it back to target," he said.

Philip Shaw at Investec suggested inflation in the UK could be set to rise above three per cent in the coming months, rather than falling down towards the target rate.

The UK is still at risk of slipping into a triple-dip recession unless growth data – to be released later in the month – shows the economy expanded between January and March.

But Jeremy Stretch, head of currency strategy at CIBC World Markets, recently told Reuters investors should not be concerned about the prospect of an unprecedented triple-dip recession.

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