Inflation in the UK has risen by more than 6% in the space of a year, according to latest figures. This is the biggest jump over a 12-month period in 30 years, the Office for National Statistics (ONS) said.
The official measure of inflation in the UK is the ‘Consumer Prices Index including owner occupiers’ housing costs’ - known as CPIH. It is calculated by tracking the price movements of 650 items that represent a basket of goods and services bought by the average UK household.
The basket is updated every year and prices are checked on a monthly basis at stores across the country. The items tracked come under 12 categories, including food and beverages, alcohol and tobacco, clothing and footwear, housing and household services and transport.
READ MORE: Cost of living deals: Stock up your cupboards and fill your freezer for less this week
The CPIH rose by 6.2% in the 12 months up to March 2022 - up from 5.5% in February and the highest recorded 12-month inflation rate in the National Statistics series, which began in January 2006. The ONS added: “The rate was last higher in the historic modelled estimates in February 1992 when it stood at 6.3%.”
Why is inflation rising?
Fuel costs are the biggest contributor to rising inflation. Average petrol prices rose by almost 13p a litre between February and March, the largest monthly rise since records began in 1990.
Household bills have also soared - particularly since October when Ofgem increased the cap on energy prices. There has been an average rise of £693 a year in standard energy tariffs over the past 12 months.
The cost of restaurants and hotels has also risen dramatically. The prices of food and drink are on the up too - particularly oils and fats, milk, cheese and eggs.
What does the Bank of England say about inflation?
The Bank of England expects inflation to reach around 8% this spring and believes it could go even higher later in the year. But it says it thinks the rate of inflation will ‘fall considerably over the next couple of years’.
It added: “That’s because we don’t expect these causes of the current high rate of inflation to persist. It’s unlikely that the prices of energy and imported goods will continue to rise as rapidly as they have done recently.
“This means that inflation will decline. And we expect inflation to be around our 2% target in two or three years’ time.”
What is Martin Lewis’ latest warning about rising inflation?
Martin Lewis, the financial journalist and founder of Money Saving Expert, recently said the current financial climate has left him ‘virtually out of tools’ to help people manage their money. He added political intervention was required to ease the burden for consumers. Today, responding to the inflation rise, he posted on Twitter that even if it does drop, it doesn’t mean prices will go down to where they were before.
He Tweeted: “Some govt ministers suggest high inflation mightn't be long term. Even if true that doesn't mean prices drop back to what they were. If a £100 trolley of groceries in 2021, costs £108 in 2022, lower inflation'd just mean it rises to eg £109 in 2023.”
He added: “Look at energy predictions… Gas & elec bills are a big factor fuelling inflation. Here's the price cap for typical usage:
- Oct 21-Apr 22: £1,277/yr
- Apr-Oct 22: £1,971
- Oct 22-Apr 23: strong prediction c£2,600
- Apr-Oct 23: weak prediction c£2,300
“So it may drop next Apr, but still cost more than now!”
