Inflation hit a 30-year high last month, putting pressure on families already struggling with rising living costs.
According to the Office for National Statistics, a record rise in fuel prices pushed inflation to 7 percent in March as consumers felt the effects of the war in Ukraine on the cost of living.
Oil and gas prices have risen since Russia’s invasion in late February, pushing up fuel, transportation and raw material prices for business. The 9.9 percent increase in fuel consumption is the largest monthly growth on record.
The cost of eating out or staying in a hotel has risen across the board with the largest monthly increase since the record began in 1988. Clothing and footwear prices have started to rise after lifting the lockdown restrictions, up 9.7 percent from March this year.
Inflation is rising faster than the Bank of England expects. Officials at the central bank’s rate-setting committee said in February that before the start of the Russia-Ukraine war, prices would rise at an annual rate of 6 percent in March. The inflation target is 2 percent.
Alpesh Paleja, the CBI’s chief economist who represents business, said: “The latest rise in inflation will not end. We will see another jump over April as the power game cap increase in offgames becomes effective. Beyond that, global commodity price volatility and ongoing supply chain disruptions will continue to weigh on prices. ”
Household energy bills rose an average of 54 percent in April. The rise, coupled with a tax increase that took effect at the same time, is expected to increase living costs.
According to economists at Capital Economics Consultancy, which expects inflation to reach 8.5 percent this month, an increase in energy bills alone will add 1.6 percentage points to the current level of inflation in April.
Ruth Gregory, a senior UK economist at Capital Economics, said: “Although we suspect that April may be the highest peak, we expect inflation to be above 7 per cent for most of 2022 and above 3 per cent for most of 2023. The decision to raise wages in the face of high inflation suggests that the Bank of England needs to raise rates even higher than expected, at least 2 per cent next year. “
Samuel Tombs, head of the UK economist at Pantheon Macroeconomics, hoped that the jump in inflation on a quarterly-point increase in interest rates at the next meeting of the Monetary Policy Committee in May would “seal the deal”.