U.K. inflation hit a three-decade high in March of 7.0% on rising fuel prices, and economists expect an even bigger jump in April due to the increase in utility bills.
The consumer price index–which measures what consumers pay for goods and services–rose at its fastest annual pace since March 1992, accelerating from the 6.2% on-year rise registered in February, according to data from the U.K.’s Office for National Statistics released Wednesday.
March’s inflation rate came in higher than the 6.7% consensus forecast from economists polled by The Wall Street Journal. Consumer prices rose by 1.1% on month, the ONS said.
The March reading highlights a worsening income squeeze on household finances this year that is likely to weigh on economic growth.
The acceleration in inflation was driven by higher prices of liquid fuels, which increased 44% compared with the previous month due to the rise in oil BRN00, +0.48% prices after the war in Ukraine. Food, clothing, transport, and restaurant and hotel prices also advanced, according to the ONS.
The core price index–which excludes volatile categories such as energy costs and food–increased 5.7% in March on year from February’s annual 5.2% rise.
Economists expect inflation to accelerate further in April as the rise in energy prices feeds through to household utility bills, pushing the headline inflation rate above 8%, according to estimates from the Bank of England.
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