U.K. Jan. annual CPI up 3.5%, prompts BOE letter (by William L. Watts)

LONDON (MarketWatch) -- Consumer inflation in the United Kingdom rose at an annual pace of 3.5% in January, requiring Bank of England Governor Mervyn King to write a letter to Chancellor of the Exchequer Alistair Darling. The BOE chief is required to write an open letter when inflation misses the 2% target by more than a full percentage point. On a monthly basis, inflation fell 0.2% in January. The annual rise was below the 3.7% predicted by a Dow Jones Newswires survey of economists. The BOE had warned that January inflation was likely to rise due in part to the expiration of a temporary cut in the value-added tax at the end of December.