UK inflation rises after Iran war pushes up fuel prices
UK inflation rose in March as the Iran war drove up fuel costs, providing the first official glimpse of the conflict's impact on the cost of living. Energy price surges are feeding through to consumer prices across the economy.
UK inflation is rising as the Iran war drives energy prices higher, with fuel costs the primary culprit. The Office for National Statistics confirmed the March reading, showing the direct transmission of Middle East tensions to British households. Energy-intensive sectors from transport to food retail are already raising prices.
The Bank of England held rates steady at 4.75%, signalling it will wait to see how energy shocks develop before cutting. Analysts warn that a sustained disruption to Middle East shipping could push inflation above 4% in coming quarters, forcing the central bank to keep borrowing costs elevated longer than previously expected. Real wages, which have only recently returned to pre-pandemic levels, are at risk of renewed erosion.
The war's ripple effects are global. Airlines including Lufthansa have announced flight cuts and fuel surcharges; manufacturers report cost pressures cascading through supply chains. For oil-importing economies, the risk is stagflation—weak growth paired with persistent inflation. The UK's labour market remains relatively strong, cushioning households for now, but rising prices threaten to dampen consumption just as the Bank was poised to ease policy.
More from Turkey
Gulf economies face long-term hit from Iran conflict
Commentators warn that the Iran war will cause long-term damage to Gulf economies requiring years or decades to repair. The conflict has driven up energy prices and hit tourism and investment in the region.
CBRT April Inflation Assessment: Annual inflation rises to 32.37 percent
The Turkish Central Bank released its April inflation assessment, showing consumer prices rose 4.18 percent month-on-month, while annual inflation climbed to 32.37 percent—up 1.50 percentage points. Energy prices surged 14.4 percent, with the underlying trend moving higher.
Oil price hits highest since 2022 after report Trump to be briefed on new Iran options
Crude oil prices have surged past $125 per barrel, reaching their highest level since 2022, as tensions escalate in the Middle East. Axios reported that US Central Command has prepared military plans for strikes on Iran, which will be briefed to President Trump, rattling global energy markets.