UK inflation rate: March 2022 rate hits 7%, what inflation means - why prices are set to rise again in April
Prices rose from 6.2% in February to 7% last month - the highest rate since March 1992
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Prices rose from 6.2% in February to 7% last month - the highest rate since March 1992, when inflation stood at 7.1%.
Here we take a look at why inflation has hit a 30-year high, reaction to the figures and the Bank of England’s prediction that April could be even worse.
Why has inflation risen to 7% in March?
The price of food has hit its highest rate for over a decade but the cost of fuel is also hitting people’s pockets.
The average price of petrol and diesel hit record highs of 160.2p and 170.5p a litre respectively.
Russia’s war on Ukraine has sent global oil prices soaring due to concerns over supply and sanctions - leaving fuel prices at record highs.
However, it is not just fuel that has seen an increase in March.
Hotel prices also rose sharply last month having fallen during lockdown.
Why is inflation expected to rise again in April?
The March inflation figures do not take into account the average 54% increase in energy bills that was applied to around 22 million households two weeks ago.
This will not appear in inflation figures until next month.
April’s figures are expected to show another jump in inflation and demonstrate the increased squeeze on ordinary people.
The Bank of England has predicted that inflation could peak at around 8% in April.
What has the reaction been to the inflation rise?
Chancellor of the Exchequer, Rishi Sunak, said: “We’re seeing rising costs caused by global pressures in our supply chains and energy markets which could be exacerbated further by Russian aggression in Ukraine.
“I know this is a worrying time for many families which is why we are taking action to ease the burdens by providing support worth around £22 billion in this financial year, including for the most vulnerable through our Household Support fund.
“We’re also helping as many people as possible into work – the best way for families to gain economic security in the longer term.”
Office for National Statistics chief economist Grant Fitzner said: “Broad-based price rises saw annual inflation increase sharply again in March.
“Amongst the largest increases were petrol costs, with prices mostly collected before the recent cut in fuel duty, and furniture.
“Restaurants and hotel prices also rose steeply in March while, after falling a year ago, there were rises across a number of different types of food.
“The price of goods leaving UK factories has continued to rise substantially with metal and transport products both at record highs and food reaching its highest rate for over a decade. Raw material costs also rose, with a notable increase in the price of crude oil.”
What does inflation mean?
Inflation is an economics term for a sustained increase in prices that simultaneously sees purchasing power decrease.
These price hikes are driven by many different factors, like the price of oil, supply chain disruption or the scarcity of a particular product.
Sharp rises in inflation can severely impact the cost of living and see consumers opt to reduce their spend on more luxury goods and services to focus on life’s necessities.