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UK inflation has risen to 3.3% in the year to March, up from a 3% rise in February, as fuel prices hit a three-year high amid the ongoing US-Israel war with Iran. According to the Office for National Statistics (ONS), the largest upward contribution from transport was partially offset by a large downward contribution from clothing and footwear over the period.
As the Middle East conflict continued, motor fuel prices rose by 4.9% in the year to March, a significant shift from the 4.6% fall recorded in February. Average petrol prices reached 140.2 pence per litre, the highest level since August 2024, while diesel prices rose by 17.6 pence per litre during the month to reach an average of 158.7 pence.
In total, prices in the transport division rose by 4.7%, up from 2.4% in the 12 months to February, marking the highest recorded since December 2022.
Air fares also contributed to this rise, increasing by 10% between February and March, in part driven by long haul routes following the Easter weekend.
Clothing and footwear provided a partial offset to these increases. Prices in this sector fell by 0.8% in the 12 months to March, the lowest rate since March 2021.
Elsewhere, food and non-alcoholic beverage inflation rose to 3.7%, up from 3.3% in February. Higher prices for chocolate, confectionery, meat, and fish were the primary drivers within this category.
Overall, the UK’s CPI inflation rate was higher than that of the EU (2.8%), Germany (2.8%) and France (2.0%). The last time the UK rate was lower than the rate for the EU overall was December 2024.
ONS chief economist Grant Fitzner said: “Inflation climbed in March, largely due to increased fuel prices, which saw their largest increase for over three years. Airfares were another upward driver this month, alongside rising food prices.
“The only significant offset came from clothing costs, where prices rose by less than this time last year. The monthly cost of both raw materials for businesses and goods leaving factories rose substantially, driven by higher crude oil and petrol prices.”
