Uk inflation soars to 3.3% amid iran war-fueled fuel price surge

UK inflation jumped to a 3.3% annual rate in March, its highest level since 2012, as soaring fuel prices triggered by the US-Israeli war on Iran sent shockwaves through the economy.

Oil price spike throttles consumer spending

The surge in prices at the pump, driven by a spike in global oil prices to near $100 a barrel, is squeezing household budgets already battered by a cost-of-living crisis. Petrol and diesel costs have skyrocketed since the start of the conflict, reflecting the closure of the critical Strait of Hormuz and the subsequent disruption to energy supplies.

The International Monetary Fund warned that Britain faces the sharpest growth slowdown and the joint highest inflation rate in the G7 this year, with the war in the Middle East threatening to trigger a global recession. March's headline rate of inflation remains stubbornly above the 2% target set by the government.

The Bank of England left interest rates unchanged last month but warned that a prolonged conflict and disruption to global energy markets could force it to raise borrowing costs to curb high inflation from becoming entrenched.

Before the war, economists predicted inflation would fall sharply in April as measures announced in Rachel Reeves' autumn budget, including cuts to energy bills, came into effect. However, forecasters now anticipate inflation will remain stubbornly high this year amid the mounting economic damage from the war.