United Kingdom inflation is starting to slip - but not as fast as many would like.
"12-month rate was 3.0 per cent in January 2018, unchanged from December 2017", the Office for National Statistics (ONS) said in a statement.
Mel Stride, Financial Secretary to the Treasury said: The good news is that inflation is expected to fall this year.
As the rise in core inflation was concentrated in the recreational and cultural services sector, where labour costs account for a high percentage of firms' costs, the data lend weight to the MPC's concern that domestically-generated inflation is beginning to pick-up in response to the tight labour market, said economist Sam Tombs at Pantheon Macroeconomics.
While statistically correct, any "feel-good" factor will have been lost on most vehicle and van owners.
Inflation has been climbing steadily since the beginning of previous year but many have predicted it has peaked at around 3%.
Today's inflation report shows prices rising across a broad spectrum of categories, not just energy.
In particular, the ONS said, prices for admissions to zoos and gardens fell less than they did a year ago.
We've seen head-fakes before on USA inflation, but most of the recent periods of increases have been energy related, such as in the months late last summer after hurricanes struck Texas and Florida.
CPI measures the growth in price of everyday items including fuel, food, clothing and household goods.
Against a broadly stronger euro, sterling weakened 0.2 per cent to 89.04 pence.
"However, elevated fuel prices and the base effect will keep CPI inflation in the vicinity of 5% for the rest of the year till March", said Madan Sabnavis, chief economist at Care Ratings, adding that cooling food prices will have a calming effect on retail inflation.
The higher target came in place of the 3.2 per cent - or Rs 5.46 lakh crore - for the current fiscal announced earlier.
Inflation has been accelerating largely thanks to the collapse in the pound following the Brexit vote, which makes imported goods more expensive.
Consumer food prices rose 4.70 percent in January, compared with 4.96 percent in December, as prices of pulses fell 20.19 percent from a year earlier. A rise in inflation can be cause of worry for the center whereas RBI's estimation of 7.2% growth for FY 2018 can be a sign of relief. James Smith from ING agrees that news on this front "has been more positive of late and suggests that pay may be starting to respond to skills shortages and a tighter jobs market".
"In our minds, one of the most likely scenarios from here is one of low or mediocre GDP growth but still elevated levels of United Kingdom inflation".
According to the report, the corresponding twelve-month year-on-year average percentage change for the urban index is 16.55 per cent in January 2018. Many British workers remain in low paid jobs in this sector.