UK inflation accelerated to 3.3% in March, driven by the biggest jump in fuel prices for more than three years amid the Iran war. The Office for National Statistics reported the consumer prices index rose from 3% in February, matching City forecasts.
Grant Fitzner, ONS chief economist, said the rise was largely due to increased fuel prices, with air fares and food also contributing. Petrol and diesel prices soared as the global oil price neared $100 a barrel following the closure of the Strait of Hormuz.
The International Monetary Fund has warned Britain faces the sharpest growth slowdown and joint highest inflation in the G7 this year. The Bank of England left rates unchanged last month but cautioned that prolonged conflict could force increases.
Chancellor Rachel Reeves said the government was acting to protect consumers, adding: “This is not our war, but it is pushing up bills for families and businesses.” The ONS noted overall transport prices rose 4.7% in the year to March, the fastest since December 2022.
Food inflation climbed to 3.7%, driven by chocolate, confectionery, and soft drinks. Economists predict headline inflation may ease in April due to government energy bill cuts but remain above 2%, with potential peaks of 3.5-5% depending on Middle East developments.
