The UK’s inflation rate climbed to 7% in the year to March, the highest rate in 30 years.

The Office for National Statistics (ONS) confirmed that its Consumer Prices Index (CPI) increased in March from 6.2% in February.

On a monthly basis, CPI inflation rose by 1.1% in March, compared with a rise of 0.3% for the same month in 2021.

The annual inflation figure of 7% is the highest CPI 12-month inflation rate in the National Statistics series, which began in January 1997. The ONS confirmed it is also the highest rate in the historic modelled series since March 1992, when it stood at 7.1%.

Commenting, Canada Life technical director, Andrew Tully, said the latest numbers will serve to “pile on the pressure” as the cost of living crisis deepens, with “no light at the end of the tunnel”.

“With price rises on a scale we haven’t experienced for 30 years, and the predicted peak yet to come, the bad news will only get worse,” Tully said. “The immediate challenge for many is to cope with rapidly rising prices as best they can, especially as wages are lagging behind.
 
“How high inflation will go is only part of the story, the longer it remains above the target of 2% will put more pressure on those struggling to make ends meet and determine our living standards for years to come.
 
“This will be felt by all of us but particularly for pensioners whose personal rate of inflation may well be above any headline rate. Though the double lock will boost the state pension by 3.1% this month, the princely rise of £5.55 a week for those receiving the full increase will offer very little in the way of comfort from the day-to-day price rises we are currently experiencing.”

Partner at Killik & Co, Rachel Winter, added: “Inflation continues its sharp rise as we enter yet another quarter of uncertainty, and the economic outlook remains murky.

“Households are fending off exorbitant energy and food bills, and with no relief in sight, consumer confidence has fallen. Recent data from the Bank of England showed that UK credit card borrowing is at its highest level since records began, suggesting that many people are struggling with the squeeze on their finances. To add to the mix, interest rates have risen, and April brought about a national insurance hike.

“With inflation expected to reach 8% over the coming months, it’s important to make savings work as hard as possible. One way to do this is through investing. While many people worry about taking too much risk with their savings, it’s also important to question whether enough risk is being taken. Low risk investments are unlikely to beat the current rate of inflation.”

Share Story: