The rate of Consumer Prices Index inflation unexpectedly remained at 4% in January, unchanged from December, the Office for National Statistics said.
Experts had expected inflation to rise, but after the news on Wednesday morning that the rate has held, chancellor Jeremy Hunt said the government’s “plan was working”.
However, while inflation is still down from a 41-year high of 11.1 per cent in October 2022 to below prime minister Rishi Sunak’s stated goal of 5 per cent by the end of 2023, it remains above the Bank of England’s longstanding target of 2 per cent.
Mr Hunt said: “Inflation never falls in a perfect straight line, but the plan is working; we have made huge progress in bringing inflation down from 11%, and the Bank of England forecast that it will fall to around 2% in a matter of months.”
Economists will be watching keenly for signs on what impact the figures could have on the Bank of England’s base interest rate, which is causing pain for borrowers and homeowners struggling with higher mortgage rates.