UK inflation rises to 3.3% as Middle East conflict pushes up fuel prices

According to the statement made today by the Office for National Statistics, the Consumer Price Index (CPI) inflation rate increased from 3.0 percent in February to 3.3 percent in March.

High fuel prices have caused inflation to rise to its highest level since December last year, as conflicts in the Middle East continue to impact the cost of living for Britons.

ONS chief economist Grant Fitzner said: ‘Inflation climbed in March, largely due to higher fuel prices, making it the biggest rise in more than three years.

In addition to increasing food prices, flight tickets also caused an increase. The only significant compensation came from clothing costs, where prices rose less than this time last year.

‘The monthly cost of raw materials and goods leaving factories for businesses has increased significantly due to the impact of high crude oil and oil prices.’

The Bank of England and most economists believe price increases will accelerate in the coming months as the impact of the war affects the cost of goods and services.

Chancellor Rachel Reeves said: ‘This is not our fight but it is increasing the bills for families and businesses. That’s why keeping costs low is my number one priority.

‘Our economic plan is sound and puts us in a stronger position to support families through this new crisis.

Chancellor Rachel Reeves was seen speaking at the Institute of Directors in London yesterday

‘We’ve cut energy bills by £117, frozen rail charges and protected drivers with a fuel duty freeze.

‘We are taking action to protect people from unfair price increases to reduce food prices at the cash register, and increase long-term energy security and build a stronger, safer economy.’

Last month, the Bank of England stated that inflation could rise to 3.5 percent in the third quarter.

Earlier this month the International Monetary Fund (IMF) suggested that a rise in energy prices could help push UK inflation towards 4 per cent, double the Bank of England’s 2 per cent inflation target.

At the beginning of the year, the central bank predicted that inflation would fall below the 2 percent target in April.

However, the conflict between US-Israeli and Iranian forces since the end of February has led to a sharp increase in oil and gas prices, while the disruption of the Strait of Hormuz shipping corridor could also affect other regions.

The latest data, from March, is the first set of ONS figures to include rising petrol and diesel costs since the start of the conflict.

RAC data from 16 April showed that the average price of a liter of petrol in UK pre-trials was 158.1 pence, 25 pence more expensive than on 28 February, when the war began.

The average price of diesel per liter was 191.2 pence, an increase of 49 pence compared to the beginning of the war.

British Retail Consortium economist Harvir Dhillon said: ‘The first signs of inflationary pressure from the conflict in the Middle East began to emerge last month, driven largely by rising fuel prices.

‘Across retail the picture was mixed. Intense competition led to renewed deflation in clothing and footwear, but increased cost pressures in the grocery sector caused food inflation to rise.

‘If food prices follow a similar trend seen following the Ukraine-Russia conflict, prices will begin to rise more significantly throughout 2026.’