U.K. annual inflation in January reached its highest level since March last year, complicating the picture for the Bank of England after it said it would cut interest rates gradually amid a weak outlook for economic growth.

Consumer prices were 3.0% higher in January than a year earlier, up from 2.5% in December, the Office for National Statistics said Wednesday. Economists had expected annual inflation to rise to 2.8% according to a poll compiled by The Wall Street Journal.