LONDON (Bloomberg) - UK
inflation surged to a 30-year-high of 7% last month, intensifying a cost of living crisis that threatens to derail the economic recovery.
Consumer prices rose by 1.1% in March alone, the fastest increase on record for that month. It adds to pressure on the government and Bank of England to act, with prices set to surge further this month when a 54% increase in energy costs hit household bills.
Fuel had the biggest impact on the inflation rate, with average petrol prices rising by 12.6p per liter between February and March, the largest monthly rise since records began in 1990, the Office for National Statistics (ONS) said.
This compares with a rise of 3.5p per liter between the same months of 2021.
Diesel prices also rose by 18.8p per liter this year, compared with a rise of 3.5p per liter a year ago.
The rise in the inflation rate was higher than the 6.7% expected by analysts and was also driven up by furniture, restaurant and food prices.
The figures for March do not yet reflect the average £700-a-year increase in energy bills that took place from 1 April when the energy price cap was raised.
Since late last year, prices have been rising fast as pandemic restrictions have been eased and firms face higher energy and shipping costs which they have passed on to consumers.
Russia’s invasion of Ukraine is now adding to the pain, as the price of oil and other commodities climb higher.
Russia is one of the world’s largest oil exporters and demand for oil from other producers has increased since the invasion, leading to higher prices.
Although the UK imports just 6% of its crude oil from Russia, it is still affected when global prices rise.