From memory , my 1950 Mk VII had " 3 1/2 litre"
Jaguar had rounded out the engine sizes since about 1936 to 1 1/2 , 2 1/2 and 3 1/2 litre, for simple marketing purposes.
The new twin cam had intended to be , I think , 3.2 litres [ in a preview perhaps of the XJ 40s dropping from 4.2 to 3.6 litres.] However Jaguar were embarrassed to find the new 3.2 litre XK engine as slower or less tractable than the old pushrod engine, so he capacity was increased.
It was said the 160 BHP achieved by the factory # 18008 SS 100 was taken as the starting point for the new engines.
Of course once the Mk VII and XK 120 got going there was no optional 4 cylinder or 2 1/2 litre options so they could just use “3.4”