UK inflation rises to 3.3% amid soaring fuel prices driven by Iran war | Inflation

Inflation in the UK rose by 3.3% in March, driven by a rise in fuel prices for motorists triggered by the Iran war.

Figures from the Office for National Statistics (ONS) show the consumer price index rose last month from 3% in February; This increases pressure on household finances, which are already strained by the cost of living crisis. The increase matched City economists’ forecasts for a 3.3% rise.

Gasoline and diesel prices have risen since the beginning of the US-Israeli war against Iran; This reflects the global oil price jumping to nearly $100 per barrel as the closure of the critical Strait of Hormuz restricts energy supplies.

The International Monetary Fund has warned that Britain faces the sharpest growth slowdown and the joint highest inflation rate in the G7 this year as war in the Middle East threatens to trigger a global recession.

The inflation rate in March continues to remain above the 2% target set by the government. While the Bank of England left interest rates unchanged last month, it warned that prolonged conflict and disruption to global energy markets could force borrowing costs to rise to prevent high inflation from stabilising.

Before the war, inflation was predicted to fall sharply in April as measures announced in Rachel Reeves’ autumn budget came into force, including cuts to energy bills. But although a drop to almost 2% was predicted, forecasters now predict inflation will remain stubbornly high this year as the economic damage from the war mounts.

More details soon …