Rising inflation: British economy caught up in the Middle East war.

The inflation rate in the United Kingdom rose in March, driven like elsewhere by the soaring fuel prices with the Middle East war (AFP / HENRY NICHOLLS)

The inflation rate in the UK rose in March, pushed up by the surge in fuel prices: the British economy, which was showing signs of recovery earlier in the year, was caught up in March by the Middle East war.

The Consumer Price Index (CPI) rose last month to 3.3% year-on-year, up from 3% in February, the Office for National Statistics (ONS) announced on Wednesday.

The inflation acceleration, in line with economists’ expectations, is “largely due to the rise in fuel prices, which saw their biggest increase in over three years,” summarized Grant Fitzner, chief economist at the ONS.

However, despite a surprising increase of 0.5% in GDP in February and an unexpected drop in unemployment to 4.9%, the UK economy seems to be facing uncertainty with inflation climbing back, according to Joe Nellis, economist at MHA.

– “This is not our war” –

The US saw the CPI rise by 3.3% in March (up from 2.4% in February), while in the eurozone, it increased by 2.6% (up from 1.9% the previous month).

The rising prices are adding pressure on the Labour government of Keir Starmer, already under fire after a new twist in the Mandelson affair.

“This is not our war, but it is driving up bills for families and businesses. That’s why my number one priority is to keep costs as low as possible for households,” Finance Minister Rachel Reeves reacted in a statement.

The British government announced reforms to prevent the increase in gas prices from significantly affecting electricity prices by promoting renewable energies.

– “Costs already absorbed” –

The UK, facing tight public finances, is one of the few Western countries yet to announce new direct support measures for households amid rising pump prices since the conflict began.

A freeze on a fuel duty, in place for several years and regularly renewed, is set to be gradually lifted starting in September.

Two weeks after the ceasefire on April 8, the situation in Iran and the Gulf seemed stable Wednesday morning after the extension of the truce by Donald Trump, who still maintains the blockade of Iranian ports.

“Even in the event of a quick resolution, there would not be a significant drop in inflation. Costs already absorbed by businesses take time to dissipate, and price setting behaviors tend to adjust slowly downward,” warns Joe Nellis.

Analysts suggest that despite the UK’s inflation rise, the Bank of England is likely to refrain from raising its key interest rate at its meeting next week.