The UK inflation rate rose to 3.3% in the year to March 2026, driven by soaring fuel prices following the outbreak of the Israel-US war on Iran, according to the Office for National Statistics (ONS). This marks an increase from 3.0% in February and represents the first official data showing the conflict’s impact on British living costs. The surge was primarily attributed to sharp increases in petrol and diesel prices, which saw their largest monthly jump in over three years. Petrol prices rose by 8.6p per litre to reach 140.2p, while diesel increased by 17.6p per litre to 158.7p. These rises were linked to global oil prices nearing $100 a barrel after disruption to shipping through the Strait of Hormuz. In addition to fuel, rising airfares and food prices contributed to the inflationary pressure. The ONS noted that clothing costs provided the only significant offset, increasing less than in the same period the previous year. Grant Fitzner, the ONS’s chief economist, stated that inflation climbed “largely due to increased fuel prices,” with the monthly cost of raw materials and factory output also rising substantially due to higher crude oil and petrol prices. The International Monetary Fund warned that the UK faces the sharpest growth slowdown and joint highest inflation rate in the G7 this year, citing the threat of a global recession stemming from the war. The Bank of England maintained interest rates unchanged but cautioned that prolonged conflict and energy market disruption could force future rate hikes to prevent inflation from becoming entrenched. Analysts project inflation could peak between 3.5% and 4.0% in 2026 if the conflict continues, though this remains well below the double-digit levels seen during the early stages of the war in Ukraine in 2022. As a net energy importer, the UK remains particularly vulnerable to external shocks in global energy markets.
44