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CPI rises to 5.2%

The new consumer price index (CPI) was released today, showing that inflation hit 5.2 per cent last month.This is up from August's rate of 4.7 per cent - and 3.2 per cent above the government's own inflation target.However, despite the rise analysts suggested that the price rises were nearing their peak.Falling inflation rates would also open the door for the Bank of England to impose further interest rate cuts.In turn, this would provide a stimulus to fading economic growth - as it would make many people's loan repayments cheaper and give them more money to spend on goods and services.Speaking to the BBC, Jonathan Loynes, chief European economist at Capital Economics, said: "CPI was once again rather worse than expected in September, but this will be the peak in inflation."The key issue now is just how far and fast it will drop back as the food and energy effects which have pushed it up so sharply over the last year finally fade or go into reverse."

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