UK inflation hit a 30-year high of 7% in March 2022

UK Inflation hit a 30-year high of 7% in March 2022, according to figures released today by the Office for National Statistics. The report confirms that the latest rise in the Consumer Price Index (CPI) is the highest annual rise since 1992. This is an increase from the 6.2% recorded in February 2022.

The increase in inflation comes following a Bank of England warning that inflation is likely to reach 8% In April 2022 and could top close to 10% later in 2002. If this was to happen, it would be the highest rate of inflation in the UK in four decades.

According to the latest information, increasing costs for gas and electricity bills added to household living costs over the last month. Furthermore, following the 54% rise in the Ofgem energy price cap, these are likely to continue to rise.

The report published today by the Office of National Statistics (ONS) summarised:

  • CPI including housing costs for owner occupiers (CPIH) rose by 6.2% in the 12 months up to March 2022. This is up from 5.5% for the previous month.
  • In March 2022, the greatest upward contributions to the annual CPIH inflation rate resulted from increases in housing & household services and transport
  • When considered on a month-by-month basis, CPIH increased in March 2022 by 0.9%, This compares to a rise of 0.2% for the previous year
  • The upward contributions to the change in the CPIH 12-month inflation rate between February and March was greatest from motor fuels (there were increases across many categories and no decreases in any of the categories)
  • CPI increased by 1.1% in March 2022, this compares with a rise of 0.3% in March 2021

UK inflation – will the latest increase push interest rates up?

The Bank of England reviews the performance of the UK economy and decides whether interest rates need to be changed eight times a year. Thursday May 5 is the next scheduled review, which would be the earliest time that interest rates could be increased. Following this, the remaining dates for 2022 are:

  • Thursday 16 June
  • Thursday 4 August
  • Thursday 15 September
  • Thursday 3 November
  • Thursday 15 December

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