Warning to UK drivers as inflation set to rise after fuel prices hike

The Office for National Statistics (ONS) will shed further light on how the conflict in the Middle East is impacting the cost of living for Britons on Wednesday morning when it unveils the latest official inflation data.

Consumer Prices Index (CPI) inflation is expected to have risen to 3.3 per cent in March, according to a consensus of experts.

It would push inflation to its highest level since December.

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The Bank of England and most economists have indicated that price increases are set to accelerate in the coming months as the impact of the Middle East conflict feeds into the cost of products and services.

Last month, the Bank of England indicated that inflation is likely to rise to as high as 3.5 per cent by the third quarter.

Earlier this month, the International Monetary Fund (IMF) suggested spiking energy prices could help push UK inflation towards 4 per cent, double the Bank of England’s 2 per cent inflation target.

At the start of the year, the central bank had predicted that inflation would dip below the 2 per cent target in April.

However, the conflict between US-Israeli and Iranian forces since late February has led to a sharp increase in oil and gas prices, while disruption to the Strait of Hormuz shipping corridor could hit other areas.

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The latest data for March will be the first set of ONS figures to include elevated petrol and diesel costs since the start of the conflict.

RAC data from Thursday, April 16, showed that the average price of a litre of petrol at UK forecourts was 158.1p, 25p more expensive than when the war began on Saturday, February 28.

The average price of a litre of diesel sits at 191.2p, up 49p compared with the start of the war.

Economists at Oxford Economics said they expect the rise in pump prices to add between 0.2 and 0.3 percentage points to the rate of inflation in March.

The fuel issues also affected Oxfordshire locally, with pumps being unavailable at certain stations in the county and prices rising.

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Oxfordshire County Council leader, Councillor Liz Leffman, spoke out last week on the fuel situation in the county and wider country, describing it as a “crisis”.

This was while announcing plans for a new £5.12m support scheme for struggling residents across the county.

She said: “We know that cost of living pressures never disappeared for a lot of people, and rising fuel costs, higher food prices and increasing household bills all continue to place a strain on residents, and the impact is often felt most sharply by those already on low or fixed incomes.

“Sadly, we expect that many more households may feel the pinch again with the ongoing fuel crisis.”