Inflation 'could be quelled by end of 2008'

The Centre for Economics and Business Research (CEBR) has suggested that inflationary pressures could be under control by the end of 2008.

Commenting on the latest inflation figures showing the rate to be 4.4 per cent in July, Charles Davis, economist with the centre, said that the statistic is perhaps less alarming than some commentators state.

There was zero per cent growth in the consumer price index for June and July, but prices fell in 2007, which contributed to the "exaggerated" rate of 4.4 per cent, he said.

Meanwhile, the Bank of England is likely to be looking to bring inflation back to its target of within a percentage point of two per cent, Mr Davis commented.

He asserted: "I suspect that will happen towards the end of this year and into 2009 as the economy slows and the global economy slows."

Homeowners worried about mortgage arrears may welcome an easing of inflationary fears if coupled with cuts to the base rate of interest, which currently stands at five per cent.

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