Consumer prices rose 2.7% in Britain in January compared with a year earlier, the government said Tuesday.
The figure remained well above the official 2% target.
It was a drop, however, from the 3% rate reported for December, which was the highest in a decade. The Office for National Statistics said lower costs for transport and food contributed to the decline from December's rate.
Retail prices rose 4.2% in January compared with a year ago. Compared with the previous month, it was a slight decline from 4.4%.
Housing costs, which are excluded from the consumer price index, were a major factor in the retail price index, as some lenders raised mortgage rates in response to the Bank of England's decision in January to raise the base rate to 5.25%.