Inflation was unchanged at 1.9 per cent in April, remaining just under the Bank of England's 2.0 per cent target, prompting analysts to assume that interest rates may be held steady at 4.75 per cent for another month yet.

The consumer price index rose by 0.4 per cent in April from March, the Office for National Statistics (ONS) said, as higher water bills and banking fees offset lower vegetable prices.

The 12-month figure matched analysts’ consensus forecasts, although the month-on-month data came in below estimates of a 0.6 per cent rise.

"The data reinforces the impression that interest rates will remain unchanged for several months to come," Global Insight economist Howard Archer said.

"The Bank of England will probably be reasonably happy with the April inflation data, which are broadly in line with what it expected in the May inflation report."

In its latest quarterly inflation report released last week, the Bank said it expected inflation to rise above 2.0 per cent briefly in the near-term before falling back again.

The rate-setting Monetary Policy Committee held the its main rate at 4.75 percent in April for the ninth successive month. In briefing papers to accompany the Queen's Speech today, the Treasury maintained it is on track to meet its fiscal rules and address under-investment in public infrastructure.

Efficiency targets agreed for government departments would deliver more than £20 billion in annual savings by 2007-2008, with around 84,000 civil service jobs to go.

With signs that the economy is slowing, most independent economists expect Chancellor Gordon Brown will have to increase taxes by up to £10 billion a year at some point if he is to stick with the government’s public spending programme.

"My government will continue to pursue economic policies which entrench stability and promote long-term growth and prosperity," the Queen told parliament as she spelled out a legislative plan stretching out to late 2006.

"To this end, my government will continue to secure low inflation and sound public finances."

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