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

Driving instructor Joe Pearson reports an extra £100 per month in petrol costs and notes broader delivery and maintenance cost pressures, though he has not yet had to pass on the higher costs to students.

Liberal Democrat Treasury spokesperson Daisy Cooper says the Iran war adds to the cost-of-living crisis and advocates policies to cut fuel, rail, and bus prices, noting broader downstream impacts from energy price pressures.

Shadow chancellor Sir Mel Stride states the war is driving higher inflation and argues Labour’s choices have left the economy vulnerable, calling for tax cuts and energy policy changes.

Chancellor Rachel Reeves says the government’s priority is to keep costs down for families and businesses, pledging to protect people from unfair price rises and to boost long-term energy security.

The Monetary Policy Committee is scheduled to meet next week to decide whether to change the Bank Rate from its current 3.75% level as higher inflation remains a risk.

Economists predict inflation could peak around 3.5% to 4% this year, higher than the Bank of England’s 2% target but lower than the double-digit rates seen earlier in the war.

The ONS notes it can take about seven to 13 months for cost increases in the food supply chain to be reflected in retail prices, underscoring why higher input costs may persist into consumer prices.

The ONS publishes the March 2026 inflation data, showing the year-to-March rate at 3.3%. It notes motor fuel rose 8.7% month-on-month (largest since June 2022) and fuel prices up 4.9% year-on-year, with airfares and food inflation contributing to the rise and clothing costs providing a modest offset.

Food inflation increases from 3.3% to 3.7% in the year to March, driven by categories such as chocolate and confectionery, meat, fish, and soft drinks, with Easter timing potentially contributing to price pressures.

The rise in airfares is partly attributed to the relatively early timing of Easter, with long-haul flights monitored by the ONS recorded before the Iran war started.

The Office for National Statistics collects its March inflation data in the middle of the month, a few weeks into the Iran war. This sets up the official measurement showing the year-to-March inflation rate.

The Iran war begins, with missile strikes and drone attacks disrupting energy production and transportation in the Middle East. The article notes wholesale energy prices have surged since the start of the conflict.