UK inflation jumps to 3.3% in March as fuel prices surge
CNBC • • business
Key Points:
- U.K. inflation rose to 3.3% in March, up from 3% in February, driven mainly by a sharp increase in fuel prices linked to the Iran war, according to preliminary ONS data.
- The rise in inflation was also influenced by higher airfares and food prices, while clothing costs increased less than last year, partially offsetting the overall inflation.
- The U.K., as a net energy importer, is particularly vulnerable to global energy price shocks, with economists expecting further inflationary pressures as the Iran conflict continues.
- The Bank of England faces uncertainty on interest rates, with many economists predicting rates will remain unchanged despite inflation spikes, to avoid triggering stagflation.
- The extended ceasefire in the Iran conflict may not prevent inflation from rising above 4% by autumn, but a weakening economy could allow policymakers to tolerate higher inflation without raising rates.
