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mpc: 22 CPI inflation had fallen slightly, to 3.0% in January from 3.1% in December, much as the Committee had expected at the time of the February Inflation Report. However, it remained significantly above the 2% target. In part that reflected the continuing impact of past increases in energy and food prices. The lower level of the sterling exchange rate was pushing up energy and food prices, and over time would put upwards pressure on the prices of other imported goods and services. If the current level of the exchange rate persisted, then there would be a positive impact on the price level. But it was uncertain how quickly this would feed through, and so how much it would add to annual consumer price inflation. Offsetting this effect, there were likely to be significant downward pressures on inflation from the growing level of spare capacity in the economy. That was consistent with the results of a special survey on cost pass-through by the Bank's regional Agents, in which, despite the lower level of sterling, many respondents had reported that their variable costs had fallen over the previous six months.