UK inflation hits 3.3%

Britain’s annual inflation rate rose to 3.3% in March, reversing February’s pause and putting price growth further above the Bank of England’s 2% target. (ons.gov.uk) The Office for National Statistics said consumer prices rose 0.7% in March alone, compared with 0.3% in March 2025. CPI including housing costs, the broader CPIH measure, rose 3.4% from a year earlier. (ons.gov.uk) Motor fuels made the largest upward contribution to the change in the annual inflation rate, and Office for National Statistics chief economist Grant Fitzner said fuel prices posted their biggest increase in more than three years. Airfares and food also pushed higher. (ons.gov.uk) (cnbc.com) Underneath the headline, goods inflation sped up while some core measures eased only slightly. Core Consumer Prices Index inflation, which strips out energy, food, alcohol and tobacco, was 3.1%, down from 3.2%, but services inflation rose to 4.5% from 4.3%. (ons.gov.uk) That mix complicates the Bank of England’s next move. Before the latest energy shock, investors and economists had expected inflation to keep cooling toward target and open the door to rate cuts. (cnbc.com) Reuters reported that economists it polled had expected 3.3% inflation in March, but the new data still hardened the view that policymakers may keep rates higher for longer. Reuters also reported that most economists expected the Bank to leave rates unchanged through 2026. (cnbc.com) (usnews.com) Business surveys published a day later pointed to the same pressure spreading beyond petrol stations. Reuters said S&P Global’s April flash survey showed a record jump in the share of British companies reporting higher input costs. (kfgo.com) (money.usnews.com) That did not come with a collapse in activity. S&P Global’s flash U.K. composite purchasing managers’ index rose to 52.0 in April from 50.3 in March, with any reading above 50 signaling growth. (pmi.spglobal.com) (tradingeconomics.com) For households, the immediate effect is simpler than the policy debate: petrol, flights and food all got pricier in March, and the overall pace of inflation moved further away from target. For the Bank of England, the question is whether that March jump proves brief or becomes embedded in wages and services prices. (ons.gov.uk) (cnbc.com)