Inflation holds at 2.7pc: economist reaction Utility bills added about a quarter of a percentage point to inflation. Food was fairly punchy, but that's normal for this time of year. The fact that we didn't have much, if any, payback for the strong increase last month would suggest to me that we are in the early stages of food re-accelerating, but that will become more clear in the next couple of months. I think there is upside and we will get to 3 percent in the not too distant future. We are addicted to inflation. PPI figures are of some comfort for the inflation profile generally. We have seen a small fall in input costs on the back of the fall in crude oil prices. But the read through into CPI inflation is relatively small. George Buckley, Deutsche: It's higher than we thought but 2.7 is in line with consensus. It's a relatively good number. If you look at the core as well that's down to 2.4 percent. PPI figures were also not too bad. We saw for example a fall in input prices. Core inflation was flat there. So that's encouraging for the future as well. It's still too high. It needs to come down further obviously. Maybe a negative output gap will help bring down inflation over the course of the next year. But for the moment it's remained sticky. Howard Archer, IHS Global Insight: Consumer price inflation up at 2.7pc in December is putting a significant squeeze on consumers" purchasing power given that latest data show that annual earnings growth was only half this rate at 1.3pc in October. This is worrying for growth prospects in 2013, as much will depend on how much consumers spend. Higher inflation is also clearly contributing to reluctance within the Bank of England to do more Quantitative Easing in the near term at least. Indeed, consumer price inflation averaged 2.7% in the fourth quarter of 2012, which is modestly above the 2.6pc expected by the Bank of England in its November Quarterly Inflation Report. However, with recovery prospects muted and fragile, we lean towards the view that the Bank of England will ultimately decide to give the economy a further helping hand with a further £50 billion of QE in the first half of 2013.