If UK inflation is statistically on a downward drift it gives the Bank of England more "wiggle" to keep interest rates on hold for longer says Suren Thiru, head of economics at the British Chambers of Commerce - despite the hawkish tone of the latest BoE inflation report.
Economists were pencilling in a drop to 2.9%.
Ben Brettell, a senior economist at Hargreaves Lansdown, said that inflation's had now been above target for 12 straight months.
It prompted a fall in the pound, making imported goods more expensive. It's a sharp shift from previous year when consumer price growth slowed, even as the economy grew and the unemployment rate fell.
The central bank last week raised its March quarter consumer price index (CPI) inflation forecast to 5.1% and projected an inflation range of 5.1-5.6% in the first half of the next fiscal year.
The ONS reports the main upward effect comes from prices for a range of recreational and cultural goods and services, in particular, admissions to attractions such as zoos and gardens, for which prices fell by less than they did a year ago.
Petrol prices rose by 1.1p per litre on the month to 121p per litre, while diesel rose 1p to 124.5p per litre.
Retail inflation cooled in January on the back of slowing food prices, while industrial output growth in December was better than expected, thanks to robust manufacturing and capital goods sectors.
Song said he expects core CPI to rise 0.2 percent, or 1.7 percent year over year.
The British Pound lost ground following the mixed data prints, with GBP/USD slipping below the 1.3750 region, but the move was short-lived as the pair ended the day at 1.3791.
On the other hand, the rural inflation rate eased by 14.76 per cent in January 2018 from 15.02 per cent in December 2017. It is expected to be lower for February as the oil rate per barrel has fallen from last month. On a nine-month period basis, cumulative growth in these three sectors (April-December 2017) over the corresponding period was 3.8 per cent, 5.1 per cent and 2.8, respectively.
Chris Williamson at IHS Markit said higher than expected in January added "further pressure for policymakers to hike interest rates again, possibly as soon as May". The market shed more than $1 trillion in market capitalization in the days of trading this month as investors, for the first time in almost a decade, believe that central banks around the world will pull back on their recession-era easy money policies and raise interest rates to ensure that rapidly growing economies don't run too hot.
Consumer food basket inflation eased a little to 4.7 per cent in January, from 4.96 per cent in December.