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UK inflation rises as global energy shock hits home
By Abigail Townsend
Date: Wednesday 22 Apr 2026
(Sharecast News) - Inflation rose in March, official data showed on Wednesday, as the war in Iran caused global energy prices to soar.
According to the Office for National Statistics, the consumer price index was 3.3% in the 12 months to March, up from 3% in February and in line with consensus.
Food and non-alcoholic drink prices jumped 3.7%. However, motor fuel prices made the largest upward contribution, spiking 4.9% compared to a fall of 4.6% in February. It was the largest increase for more than three years.
War in the Middle East has caused global energy prices to surge, with refineries in the region either shuttered or damaged and the vital Strait of Hormuz too dangerous to pass. The US Navy has also started its own blockade of the waterway, in a bid to halt Iranian oil exports.
The average price of petrol rose by 8.6p per litre between February and March, to 140.2p, the highest since August 2024. Diesel prices were also sharply higher.
Overall transport prices jumped 4.7% in March, up from 2.4% in February, with airfares 10% stronger - the largest hike between February and March since 2016. The upward effect came almost entirely from long haul flights. However, the ONS noted that all prices were collected before the outbreak of war in the Middle East.
Stripping out volatile energy, food, alcohol and tobacco prices, core inflation rose 3.3%, down from 3.4%.
The ONS also published producer prices data on Wednesday, which also showed the impact of higher energy prices. The costs of raw materials prices spiked 5.4% in the year to March, up from a revised 0.7% in February, while factory gate prices were 2.6% higher, against a rise of 1.8% a month previously.
Grant Fitzner, ONS chief executive, confirmed the rises were driven by higher crude oil and petrol prices.
The Bank of England's Monetary Policy Committee is due to meet next week. Prior to the outbreak of war, the central bank had been widely expected to continuing cutting rates this year on the back of falling inflation. The MPC had previously forecast CPI to fall back to 2.1% by the second quarter.
However, when it last met in March it left rates unchanged and said it stood ready to tackle any spike inflation, warning it could reach 3.5% in the third quarter if the energy shock continued.
On a monthly basis, CPI rose by 0.7%, compared to a 0.3% uplift previously, while CPI including owner occupiers' housing costs rose 3.4%.
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