What is the UK’s inflation rate?
UK inflation has risen to 7% – the highest rate it has been for 30 years.
Surges in the price of fuel, energy and food are putting increasing pressure on household budgets.
Why has inflation risen so much?
- Fuel costs are the biggest contributor – average petrol prices rose by 12.6p per litre between February and March, the largest monthly rise since records began in 1990
- Household fuel bills have soared – from 1 April, about 18 million households on standard tariffs saw their annual bill jump from £1,277 to £1,971 – an average increase of £693
- The rate of VAT – the tax paid when buying goods and services – is going up for some businesses; during the pandemic, the government reduced this for hospitality and tourism firms to support them, but since 1 April, this has returned to the standard 20% rate
- Air passenger duty and vehicle excise duty rates are also increasing, as is the cost of postage, and water bills in England and Wales.
- Regulated rail fares have gone up by up to 3.8% in England and Wales, the highest fare rises for nine years
- Higher interest rates are also making mortgage payments more expensive for some homeowners
The headline inflation rate is an average, and price rises in different areas rise at different rates. One food industry boss has warned that food prices could rise by up to 15% this year.