{"id":19774,"date":"2026-04-22T18:05:40","date_gmt":"2026-04-22T18:05:40","guid":{"rendered":"https:\/\/www.europesays.com\/britain\/19774\/"},"modified":"2026-04-22T18:05:40","modified_gmt":"2026-04-22T18:05:40","slug":"iran-war-drives-uk-inflation-up-to-3-3-in-major-blow-for-reeves-2","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/britain\/19774\/","title":{"rendered":"Iran war drives UK inflation up to 3.3% in major blow for Reeves"},"content":{"rendered":"\n

UK inflation rose in March in a clear sign of the impact <\/a>of the Iran-US war on the economy.<\/p>\n

The latest figures, released on Wednesday, are the first from the Office for National Statistics (ONS) to include elevated petrol and diesel costs since the start of the conflict. Prices have gone up as a result of the closure of the Strait of Hormuz shipping corridor.<\/p>\n

The ONS figures showed consumer prices index (CPI) inflation rose 3.3 per cent in the year to March, up from 3 per cent in February.<\/p>\n

The increase marks a blow for chancellor Rachel Reeves, who has made cutting the cost of living her number one priority. Research by the Resolution Foundation has found<\/a> that the average household will be \u00a3480 worse off this year due to increased energy costs.<\/p>\n

In response, Ms Reeves said the Iran crisis was \u201cnot our war, but it is pushing up bills for families and businesses\u201d.<\/p>\n

She continued: \u201cThat\u2019s why it\u2019s my number one priority to keep costs down. Our economic plan is the right one and has put us in a stronger position to support families in the face of this new crisis.\u201d<\/p>\n

Pointing to measures announced before the conflict, she said: \u201cWe\u2019ve taken \u00a3117 off energy bills, frozen rail fares and protected motorists with the fuel duty freeze.<\/p>\n

\u201cWe\u2019re acting to protect people from unfair price rises if they occur, to bring down food prices at the till, and are boosting long-term energy security \u2013 building a stronger, more secure economy.\u201d<\/p>\n

\"The The chancellor faces yet another blow after inflation rose 3.3 per cent in the year to March (Getty) <\/p>\n

Heating oil, some food prices, including chocolate and fish, and airfares all contributed to the rising prices, with Sanjay Raja, chief UK economist at Deutsche Bank, noting that the former was one of the first commodities to show the impact<\/a> of the war.<\/p>\n

\u201cEnergy prices rose substantially with pump prices up just under 8 per cent month-on-month and heating oil prices up a staggering 90 per cent,\u201d he said.<\/p>\n

\u201cFood prices were a little stronger than we thought \u2013 both processed and unprocessed foods and yoghurt, chocolate, fish all seeing bigger gains than we expected. Services prices also shot up, but only because of airfares, which jumped 10 per cent. Core goods inflation remained subdued on the back of weaker clothing prices, furniture prices, car prices, and IT goods such as software.<\/p>\n

\u201cThe good news \u2013 if any \u2013 was that our core services measures, which strip out some of the more volatile elements in the services basket, remained broadly unchanged. And near-term CPI is still expected to take a big step down as base effects drag on the annual rate. The bad news? The drop won\u2019t be as big as we previously anticipated.\u201d<\/p>\n

The rise in inflation also means the Bank of England is unlikely to cut interest rates<\/a> any time soon.<\/p>\n

Before the Iran<\/a> war, it had signalled that it might cut rates two or three times this year from the present 3.75 per cent \u2013 though unemployment figures falling in Tuesday\u2019s data at least eases the BoE\u2019s two-way tug-of-war in that regard, as rising unemployment is another reason to cut rates, while inflation is an argument to hike them<\/a>.<\/p>\n

Dropping rates would have led to cheaper new mortgages and lower borrowing costs for businesses.<\/p>\n

\"Food Food prices, including chocolate and fish, have all contributed to rising inflation, experts say (AFP\/Getty) <\/p>\n

Emma Wall, chief investment strategist at Hargreaves Lansdown, said: \u201cInflation is likely to remain elevated in April too, and markets are now pricing in one rate rise later this year, but our house view is that rates are held through the conflict \u2013 returning to the expected rate cutting cycle later than forecast just a couple of months ago, but on path to neutral next year.\u201d<\/p>\n

While Samuel Fuller, director of Financial Markets Online, warned it was \u201cpremature to dismiss the UK’s inflationary threat\u201d.<\/p>\n

\u201cThis March data only captures the inflationary impact of the first month\u2019s fighting, and April\u2019s data may prove much worse,\u201d he added.<\/p>\n

The news on inflation comes amid fears that a further escalation in the Middle East conflict could also impact government borrowing.<\/p>\n

The influential Resolution Foundation has found that a \u201csevere but plausible scenario\u201d, in which the conflict intensifies and delivers the largest hits to the economy, would result in government borrowing increasing by \u00a316bn a year in 2029-2030.<\/p>\n

RAC data from 16 April showed that the average price of a litre of petrol at UK forecourts was 158.1p, 25p more expensive than when the war began on 28 February.<\/p>\n

The average price of a litre of diesel sits at 191.2p, up 49p compared with the start of the war.<\/p>\n

Experts at Oxford Economics said they expect the rise in pump prices to add between 0.2 and 0.3 percentage points to the rate of inflation in March.<\/p>\n","protected":false},"excerpt":{"rendered":"UK inflation rose in March in a clear sign of the impact of the Iran-US war on the…\n","protected":false},"author":2,"featured_media":19775,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[8571,9122,1326,1437,1312,9121,182,5909,5,6],"class_list":{"0":"post-19774","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-uk","8":"tag-consumer-prices-index","9":"tag-diesel-costs","10":"tag-food-prices","11":"tag-iran-crisis","12":"tag-office-for-national-statistics","13":"tag-pump-prices","14":"tag-rachel-reeves","15":"tag-resolution-foundation","16":"tag-uk","17":"tag-united-kingdom"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@UnitedKingdom\/116449687821804602","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/posts\/19774","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/comments?post=19774"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/posts\/19774\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/media\/19775"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/media?parent=19774"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/categories?post=19774"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/tags?post=19774"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}