Britain’s Inflation Rate Rises on Higher Transport Costs

LONDON — Britain’s inflation rate rose in March as higher transport costs, especially motor fuels and air fares, pushed up prices across the economy, according to data released Wednesday by the Office for National Statistics.

The Consumer Prices Index including owner occupiers’ housing costs, the government’s broadest measure of inflation, increased 3.4% in the 12 months through March, up from 3.2% in February. The standard Consumer Prices Index rose 3.3%, from 3.0% a month earlier. On a monthly basis, CPIH climbed 0.6% and CPI rose 0.7%.

For food and drink businesses, the report showed a mixed picture. Prices for food and non-alcoholic beverages rose 3.7% over the year to March, up from 3.3% in February. Alcohol and tobacco inflation eased to 3.3%, from 3.6% the month before, while the monthly increase slowed to 0.2%. That suggests some moderation in one category that has been closely watched by retailers, pubs and spirits producers as they manage pricing and consumer demand.

Transport was the biggest driver of the monthly rise in inflation. The annual rate for transport prices jumped to 4.7% in March from 2.4% in February, the highest since December 2022. Motor fuel prices were a major factor: petrol rose by an average of 8.6 pence per liter between February and March, while diesel climbed 17.6 pence per liter. The average price of petrol reached 140.2 pence per liter, its highest level since August 2024, and diesel averaged 158.7 pence per liter, the highest since November 2023.

Air fares also rose sharply, increasing 10% between February and March, with the ONS saying the move was driven largely by long-haul routes around the Easter period. Vehicle maintenance and repair costs also added upward pressure.

Housing and household services remained one of the largest contributors to inflation overall, with annual price growth at 4.3%, slightly above February’s 4.2%. Within that category, domestic heating oil prices surged 90.5% in March compared with a year earlier, lifting the annual rate for electricity, gas and other fuels.

Core inflation, which strips out energy, food, alcohol and tobacco, eased slightly in both measures. Core CPIH fell to 3.3% from 3.4%, while core CPI slipped to 3.1% from 3.2%. Goods inflation accelerated to 2.1% from 1.6% in both CPIH and CPI, while services inflation edged higher to 4.3% in CPIH and 4.5% in CPI.

Clothing prices moved in the opposite direction from transport and helped offset some of the rise in inflation overall. Clothing and footwear prices fell 0.8% over the year in CPIH terms, down from a gain of 0.9% in February, marking the weakest annual reading since March 2021.

The UK’s CPI rate of 3.3% remained above that of the European Union average at 2.8%, as well as Germany’s 2.8% and France’s 2.0%, according to the ONS comparison included in the release.

The data come at a time when households are still facing pressure from higher borrowing costs and uneven wage growth, while retailers continue to weigh how much pricing power they have left after several years of volatile input costs.