A rise in inflation, fuelled by soaring house prices, has lengthened the odds against a further cut in interest rates.

The data came as the chancellor dismissed suggestions of a crash in the housing market.

Quizzed by MPs he said: "We are in a period of low interest rates, so the cost of mortgages related to average incomes is at one of its lowest levels in recent decades.

"When you have got fast-growing house prices, it is one issue that the Bank of England and the Treasury are right to take very seriously indeed."