Inflation remained stubbornly high in January, sticking at 2.7pc for a fourth month in a row due to higher prices of alcohol and tobacco and disappointing economists who had been looking for a fall.
The Office for National Statistics said that annual consumer price inflation held at 2.7pc, which marked the first time inflation remained unchanged for four months in a row since records began in 1996.
While CPI remained unchanged, the Retail Prices Index measure of inflation - which includes housing costs such as council tax and mortgage interest payments - rose to 3.3pc in January from 3.1pc in December.
By far the biggest upward contribution to CPI, said the ONS, was the rising prices of alcohol and tobacco where prices increased by 4.3pc between January and December as Christmas discounts came to an end. The biggest downward contribution was clothing and footwear, where prices dropped by 5.4pc.
A shortage of vegetables in the UK helped push up food and drink prices, according to the statistics agency, as more produce was sourced overseas.
Forecasters had hoped inflation would decline to 2.5pc or 2.6pc ahead of what many expect to be a few months of small rises that could push CPI above 3pc by July.
Inflation is expected to rise this month as a price hike from energy giant E.ON on January 18 takes effect. The ONS said the final of the “big six” energy hikes would be taken into account in February’s figures.
The Bank of England will publish its outlook for inflation over the next two years tomorrow and has already warned it expects inflation to remain above the Government's 2pc target , possibly for as long as the next two years.
Joost Beaumont, senior UK economist at ABN Amro, said: “The high inflation, low growth dilemma will probably once again be the main topic of the Bank’s Inflation Report on Wednesday. We expect the Bank to lift its inflation forecasts, while lowering its growth projections, at least in the near-term.”
Economists suggested that the inflation figures brought little relief for households grappling with rising prices.
Howard Archer at IHS Global Insight said that it looks highly likely that CPI will reach 3pc within the next few months and stay close to that level until the fourth quarter.
"Oil prices have hit a near eight-month high in February, while food prices look likely to stay relatively elevated in the near term at least due to recent poor harvests," he added.
"On top of this is the increasing risk that import prices will be pushed up by sterling’s recent weakness."
However, there was encouragement in the core inflation figures, which strips out volatile food and energy costs. Core CPI was down to 2.3pc from 2.4pc in December.
The retail prices index (RPI), which includes housing costs and is often used in wage negotiations, rose from 3,1pc to 3.3pc.
CPI has now been above the Bank’s 2pc target for 37 months, and the Bank is expected tomorrow to say it will remain higher the target for another 24 months.
A Treasury spokesperson said: "Inflation is down by almost a half from its peak of 5.2pc. The Government has taken continued action to help with the cost of living, by announcing a further increase in the tax-free personal allowance and freezing fuel duty for more than two years."
Separate data released by the ONS showed that factory-gate inflation rose 2pc on the year in January, the slowest since July. Input prices climbed 1.8pc, the fastest since March last year and pushed up by domestic food prices, possibly a reflection of bad weather which hurt British crops.