India's retail inflation rate rose to 3.81 percent in March from February's 3.65 percent, mirroring a revival in household spending after months of waning demand triggered by a demonetisation-induced cash crunch.
Samuel Tombs, chief United Kingdom economist at Pantheon Macroeconomics, said: "March's CPI inflation rate comfortably exceeds the 2.1% anticipated by the MPC in February's Inflation Report, largely due to higher core goods prices".
Economic growth will slow in the coming months as rising prices start to hit consumer spending, it's been claimed.
The growth rate, nearly on par with market expectations, quickened from an increase of 0.8 percent in February.
Sterling crept up by around 0.14 per cent against the euro to 1.1731 following the news, and also lifted to 1.2432 against the U.S. dollar.
"Our most recent Totaljobs Employment Index also reflected the strength of the job market, with applications up 32 per cent in the first three months of 2017 compared with the same period past year".
By end of last month, the monetary policy committee at CBE left its key interest rates unchanged, for the fourth consecutive meeting, keeping its overnight deposit rate at 14.75 percent and its overnight lending rate at 15.75 percent.
But after taking into account inflation, total pay growth rose just 0.2 percent and excluding bonuses it inched up just 0.1 percent in the three months to February.
Chinese consumer price inflation remains weak, and it looks like the rebound in factory-gate prices is now also past its peak.
ONS deputy national statistician Jonathan Athow said CPI paused in March as food, drink and clothing prices all climbed, while air fares fell slightly compared to previous year due to the timing of Easter.
But he pointed to the UK's "underlying resilience" with jobs growing - and said while inflation was forecast to be higher this year it was expected to decline in 2018.
Compared to same period of 2016 air fare inflation dived 22.8%, reflecting an Easter weekend price spike which falls in April this year.
"The CPI also will be boosted over the next two months by further utility price rises".
Inflation held steady in March as rising price tags on food and clothing were offset by a drop in the cost of flights and fuel.
Economists noted the tempered increase in transport costss was merely due to the timing of Easter, rather than an actual slowing down of price rises. Prices increased year-in-year in all sub-categories, the first time all goods and services witnessed inflation since June 2014.