UK inflation rose to 3.3% in March, an increase from 3% in February. This acceleration provides the first official look at how the ongoing Iran war is impacting the cost of living in the United Kingdom. The rise matched forecasts from City economists.
The surge was driven by a sharp increase in fuel and energy costs triggered by the Iran war. According to the Office for National Statistics, fuel prices experienced their largest increase in over three years, leading to the biggest jump in transport costs since December 2022.
The rise adds further pressure to household finances already affected by a cost of living crisis. These figures have also forced markets to reassess expectations for the Bank of England, making a previously anticipated interest rate cut next week appear very unlikely.