LONDON (Reuters) - British inflation shot further above its two percent target in January, though the Bank of England will almost certainly say the jump is temporary.

The Office for National Statistics said consumer price inflation rose to 3.5 percent year-on-year last month from 2.9 percent in December, its highest level since November 2008 and in line with analysts' forecasts.

Bank of England Governor Mervyn King will now publish a letter explaining why the central bank has missed its two percent inflation target by more than a percentage point.

King got his excuses in early. He has warned inflation was likely to exceed three percent this month, but said the central bank's greater concern remained the risk of inflation sliding below two percent over the medium term, boosting expectations that interest rates will stay at record lows for most of this year.

Sterling rose and gilt futures pared gains after the data.

"Inflation was always going to spike in January due to the VAT hike and unfavourable base effects resulting from sharply falling oil and food prices a year earlier," said Howard Archer, economist at IHS Global Insight.