Inflation
7 articles tagged with this topic.
Bank of England Monetary Policy Report – February 2026
The MPC voted 5–4 to hold Bank Rate at 3.75%, with four members preferring a 0.25pp cut, as CPI inflation (3.4% in December) is projected to fall close to the 2% target by Q2 2026, largely due to lower energy bills helped by measures in Budget 2025. The Bank signals further cuts are likely but will be a closer call, given easing wage growth and a loosening labour market alongside lingering services inflation and administered price effects. Ofgem’s price cap is expected to drop in April to £1,616 from £1,758, and private-sector pay growth has moderated toward c.3–4%.
Bank Rate held at 3.75% as BoE monitors energy-driven inflation
On 19 March 2026, the Bank of England’s MPC kept Bank Rate at 3.75% after six cuts since August 2024. It cited the war in the Middle East raising global energy prices, which will lift UK inflation above earlier expectations in the short term; current CPI inflation is about 3% versus a 2% target. The MPC said it will monitor conditions closely and act to keep inflation on track in the medium term.
UK petrol and diesel prices fall after weeks of rises
UK pump prices for petrol and diesel have dipped slightly after weeks of increases driven by Gulf tensions and the effective closure of the Strait of Hormuz, which had pushed crude oil from about $70 to a peak of just over $119 a barrel. With a temporary ceasefire, Brent has fallen back below $100, and the RAC expects further modest reductions; current averages are roughly 158p/litre for petrol and 191p/litre for diesel.
UK food inflation heading towards 10% due to Iran war, industry says
The Food and Drink Federation (FDF), representing around 12,000 UK manufacturers, now forecasts UK food and non-alcoholic drink inflation of roughly 9–10% by December 2026, up from a pre‑war projection of 3.2%, due to Iran war‑related disruptions to energy, fertiliser and shipping via the Strait of Hormuz. The industry is highly energy‑intensive; as hedges roll off, larger firms expect higher costs and smaller producers buying energy on spot markets are already seeing spikes. Early impacts are visible at fuel pumps, while grocery inflation stood at 4.3% in the four weeks to March 22, according to Worldpanel by Numerator.
UK food inflation seen nearing 10% by December 2026 due to Iran war disruption, FDF warns
Britain’s Food and Drink Federation now expects food and non‑alcoholic drink inflation to reach around 9–10% by December 2026, up sharply from a prior 3.2% forecast, because the Iran war has disrupted the Strait of Hormuz and pushed up oil, gas and fertiliser costs. The energy‑intensive food industry faces higher input prices; larger firms with hedges may see delayed impacts while many SMEs on spot markets face immediate spikes, with farmers warning of near‑term rises for greenhouse‑grown produce. UK grocery inflation ran at 4.3% in the four weeks to March 22, while higher fuel prices show the first clear impact on households.
Supermarket Price Wars: Asda Cuts and Rival Responses
Asda has initiated significant price cuts on nearly 1,000 products, aiming to undercut rivals by 5-10% by late 2026. This has intensified a price war among major UK supermarkets such as Tesco, Morrisons, and Sainsbury's, who are also adjusting their pricing strategies. Despite rivals making numerous price cuts, overall prices continue to rise for some, and discounters like Aldi and Lidl still consistently offer lower prices on a wider range of items.
Economic pain from Iran war will hit poor countries hardest, officials say
At the IMF/World Bank spring meetings, officials warned that the Middle East conflict and earlier closure of the Strait of Hormuz have delivered a negative supply shock that will hurt developing, import‑reliant economies most. Higher energy, food and fertiliser prices, alongside a stronger US dollar, are set to raise inflation, weaken growth and worsen debt vulnerabilities, especially in sub‑Saharan Africa; several countries may need augmented IMF support.