Inflation in Britain held steady last month as falling fuel prices eclipsed higher food costs, according to statistics released Tuesday. The Office for National Statistics said the drop in the cost of petrol and diesel offset price rises sparked by shortages of fruit and vegetables in January, keeping the Consumer Price Index, or CPI, unchanged at 1.6 percent. The January sales also helped to check inflation during the month, with larger price cuts in clothing and footwear compared with last year, the office said. Economists had expected the January sales to have a stronger downward effect on the inflation rate, reducing it by 0.1 percentage points to 1.5 percent for the month. The unchanged rate is likely to spark more speculation of an interest rate rise _ many economists expect a tightening in the cost of borrowing from the current 4.75 percent in the next six months if data continues to show an improvement in the British economy. After months of slow consumer spending and a dull housing market, the economy has grown faster than expected in recent months, with gross domestic product rising by 0.7 percent in the last quarter, higher than estimates of 0.5 percent. The underlying Retail Price Index, which excludes mortgage interest payments, was 2.1 percent in January, down from 2.5 percent in December. The headline inflation rate, which includes mortgage costs, was also down, standing at 3.2 percent against 3.5 percent the previous month.
