UK inflation accelerated to 3.3% in March after the Iran war triggered the biggest jump in fuel prices for more than three years. The Office for National Statistics (ONS) said the consumer prices index increased from 3% in February, matching City forecasts.
Grant Fitzner, the ONS chief economist, said: “Inflation climbed in March, largely due to increased fuel prices … Air fares were another upward driver this month, alongside rising food prices.” Petrol and diesel prices have soared since the start of the Middle East conflict, reflecting a jump in the global oil price to close to $100 a barrel as the closure of the strait of Hormuz throttles energy supplies.
The average price of petrol rose by 8.6p a litre between February and March to 140.2p, the highest since August 2024. Diesel prices rose by 17.6p a litre to 158.7p, the highest since November 2023. Food price inflation climbed from 3.3% to 3.7%, driven by chocolate, confectionery, meat, fish and soft drinks.
The International Monetary Fund has warned that Britain faces the sharpest growth slowdown and joint highest inflation rate in the G7 this year. The Bank of England left interest rates unchanged last month while warning that a prolonged conflict could force it to raise borrowing costs.
Chancellor Rachel Reeves said: “This is not our war, but it is pushing up bills for families and businesses. That’s why it’s my number one priority to keep costs down.” Economists expect headline inflation to fall back in April as government measures to cut energy bills take effect, but the rate is unlikely to drop close to 2% due to the conflict.
