UK inflation rate rises to 3.3% in March after Iran war pushes up fuel prices

Rachel Clun
Business reporter

The rise in UK inflation is just the start of the impact of the Iran war on prices, experts are saying.

Adam Deasy, an economist at PwC UK, says fuel prices are the quickest to respond to any oil shock.

“This is just the first wave of the energy shock, primarily showing up in higher prices at the pump,” he says.

“We are yet to see the knock-on impact of price pressures in downstream or byproducts to oil and gas, such as fertiliser, helium, plastics or metals.”

Ruth Gregory, deputy chief economist at Capital Economics, says the next eight months will be “uncomfortable” for the Bank of England’s monetary policy, with inflation expected to remain above its target rate of 2% for some time.

But with unemployment still high, Gregory expects the Bank to keep interest rates at the current 3.75% level for now.