UK inflation rises to 3.3% this month
- Britain’s annual consumer inflation rate rose to 3.3% in March, the Office for National Statistics said on April 22, up from 3.0% in February as petrol prices jumped. - Consumer Prices Index inflation rose 0.7% on the month, with motor fuels the biggest upward driver; the Office for National Statistics also said clothing provided the largest offset. - The reading was the first clear sign of the Iran war hitting U.K. prices before the Bank of England’s April 30 rate decision. (ons.gov.uk)
Britain’s inflation rate rose to 3.3% in March, reversing the slowdown that had brought it closer to the Bank of England’s 2% target. (ons.gov.uk) The Office for National Statistics said consumer prices increased 0.7% from February and 3.3% from a year earlier, up from 3.0% annual inflation in February. (ons.gov.uk) Motor fuels made the biggest upward contribution to the monthly and annual change in inflation, while clothing was the largest category pulling the other way. ONS chief economist Grant Fitzner said fuel prices posted their biggest increase in more than three years. (ons.gov.uk) (cnbc.com) Airfares and food prices also pushed the index higher in March, according to Fitzner. The House of Commons Library said food inflation rose to 3.7% from 3.3% in February. (cnbc.com) (commonslibrary.parliament.uk) The March data matters because it landed eight days before the Bank of England’s next Monetary Policy Committee decision on April 30. The Bank’s published schedule shows that meeting also comes with a new Monetary Policy Report. (bankofengland.co.uk) Before the Middle East energy shock, economists had expected inflation to keep cooling. Reuters reported that the March figures were the first hard evidence of the Iran war feeding through to U.K. consumer prices. (msn.com) Markets were already bracing for a difficult policy call. Reuters reported on April 21 that economists expected the Bank of England to leave Bank Rate at 3.75% on April 30 and likely keep it there through the rest of 2026. (usnews.com) ING said on April 24 that Gulf and inflation risks were keeping short-dated interest rates firm as traders priced the chance of central banks responding to higher prices. The bank said the longer the Strait of Hormuz stayed closed, the bigger the oil shock. (think.ing.com) For households, the immediate signal was simpler: petrol, flights and food all got more expensive in March. For policymakers, the question on April 30 is whether that shock fades or starts to stick. (ons.gov.uk) (bankofengland.co.uk)
