Inflation strikes 30-year high in March

Britain’s annual inflation rate soared to the highest level in three decades last month as energy prices rocket, official data showed Wednesday.

Inflation surged to 7 per cent in March from 6.2 per cent in February, the Office for National Statistics (ONS) said in a statement. Food inflation stood at 5.9 per cent.

“Broad-based price rises saw annual inflation increase sharply again in March,” said ONS chief economist Grant Fitzner.

“Amongst the largest increases were petrol costs.”

Prices of restaurant meals and hotel rooms also rose steeply last month after falling a year earlier during a pandemic lockdown in the UK.

Costs are surging worldwide as economies reopen from pandemic lockdowns and on fallout from the war in Ukraine.

US inflation rose by a huge 8.5 per cent over the 12 months to March, the biggest jump in four decades, official data showed Tuesday.

Responding to the figures, Helen Dickinson, chief executive of the British Retail Consortium, said retailers are taking measures to ease the pressure despite the cost increases to their operations.

“Households around the UK will be feeling the pinch as the cost of living continues to rise. Retailers are trying to help consumers by expanding their value ranges and doing all they can to keep the price of essentials down,” she said.

“This can be seen in the BRC’s Shop Price Index, which tracks the price of basic goods, which showed a slower rise in the price of essential foods and other products than the inflation levels report by the ONS.

“Consumer confidence has fallen significantly in recent months, as worries around personal finances rise. Households face a plethora of rising costs, with higher inflation to come as the increase in the energy price cap pushes up April’s figures. Retailers are not exempt from these pressures, as the costs of transport, energy, raw materials and staff wages all continue to rise.”

‘Worrying time’

The Bank of England has predicted that UK annual inflation could reach double figures by the end of the year.

“We’re seeing rising costs caused by global pressures in our supply chains and energy markets which could be exacerbated further by Russian aggression in Ukraine,” Chancellor Rishi Sunak said Wednesday.

“I know this is a worrying time for many families,” added Sunak.

British cost-of-living is set to soar even higher owing to an April tax hike on UK workers and businesses and a fresh surge in domestic energy bills that kicked in this month.

“Soaring energy and fuel prices were the main drivers of the rise in (UK) inflation in March, but we are paying more for everything,” Myron Jobson, senior personal finance analyst at Interactive Investor, said following Wednesday’s data.

“Supply shortages and production bottlenecks owing to the pandemic have forced firms to raise their prices of late,” while Russia’s invasion of Ukraine “has made the outlook for inflation worse”, he added.

ONS Consumer Price Index figures, March 2022