The latest ONS inflation data for March published today saw CPIH inflation rise to 6.2 per cent, and CPI inflation rise to 7.0 per cent.
This is not only the highest rate of inflation consumers have faced in 30 years, it is also the fastest inflation has picked up over the course of a year – in March 2021, CPI inflation was just 0.7 per cent compared to the 7 per cent in the latest figures.
A further significant increase is expected in April – setting new records in terms of the scale and pace of rising prices – as a result of the energy price cap rising.
Chancellor Rishi Sunak said rocketing prices are a result of “global pressures”, warning that they 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,” he outline in a statement this morning.
Commenting on the data, Jack Leslie, senior economist at the Resolution Foundation, said: “Inflation last month reached levels not seen since the early 1990s, but it is still well below the price pressures families are currently experiencing with the recent energy price cap likely to have taken inflation up to over 8 per cent in April.
“With ONS data yesterday showing that wages are not keeping pace with rising prices, Britain’s cost-of-living crisis – on track to big the biggest squeeze since the mid-70s – will continue to worsen before it starts to ease at some point next year.
“The sheer scale of this inflation-led squeeze on living standards makes it all the more remarkable how little support the Chancellor provided in his Spring Statement – a decision that will surely have to be revisited before the Autumn Budget.”
Alpesh Paleja, CBI lead economist, said: “The latest rise in inflation will not be the last. We’ll see another jump over April, as the rise in Ofgem’s energy price cap comes into effect. Beyond this, volatility in global commodity prices and ongoing supply chain disruption will continue to stoke price pressures. The result will be even higher costs for businesses, and a deep squeeze in the cost-of-living for households.
“The energy-centric nature of inflationary pressures highlights the need to double-down on investment in green energy. Making homes and commercial buildings more energy efficient would help reduce demand and consumer bills. In the near-term, reducing policy costs for energy intensive industries and continuing support for low-income households will be essential in helping those worst hit.”
