UK inflation rises to 3.3% in March amid soaring fuel prices driven by Iran war

The United Kingdom's inflation rate increased to 3.3% in the year to March 2026, marking a rise from 3.0% in February.

This increase is largely attributed to a significant jump in fuel prices following the outbreak of the US-Israel war with Iran.

According to the Office for National Statistics (ONS), motor fuel prices rose by 8.7% month-on-month in March, the largest increase since June 2022.

Over the year to March, fuel prices increased by 4.9%, the highest rise since January 2023.

Airfares and food prices also contributed to the inflation rise.

The inflation increase has added pressure on household finances and is expected to slow down the UK economy as higher energy costs reduce disposable income for both consumers and businesses.

Economists predict inflation could peak between 3.5% and 4% in 2026, although this remains lower than the double-digit inflation rates seen during the early stages of the 2022 Ukraine conflict.

The Iran war, which began on 28 February 2026, has disrupted energy production and transportation in the Middle East.

Missile strikes and drone attacks have slowed or halted energy flows, causing wholesale energy prices to soar globally.

ONS Chief Economist Grant Fitzner noted that rising costs for raw materials and goods leaving factories were driven by higher crude oil and petrol prices.

Food inflation rose from 3.3% to 3.7% in the year to March, influenced by increases in chocolate, confectionery, meat, fish, and soft drinks prices, possibly linked to Easter timing.

The Food and Drink Federation forecasts that food inflation could reach as high as 10% by the end of the year.

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