UK inflation hits 7% as cost of living crisis deepens – business live

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UK inflation has accelerated to a new 30-year high, deepening the cost of living crisis.

Consumer prices jumped by 7% in the year to March, up from 6.2% in February, figures just released show, as living standards continue to be squeezed.

That’s the highest CPI inflation rate since March 1992, and higher than expected, as energy, fuel and food continue to rise sharply.

On a monthly basis, CPI rose by 1.1% during March.

This jump in inflation means workers are taking a real terms pay cut. Total pay (including bonuses) rose by 5.4% per year in the three months to February, while regular pay rose 4%.

Inflation is expected to rise again in April, possibly over 8%, due to the 54% increase in the energy cap. That will intensify the pressure on households, with economists predicting this will be the worst parliament on record for living standards growth.

Inflation is hitting business confidence too. Sentiment among financial services firms has dropped at its quickest pace since September 2019, the latest CBI/PwC Financial Services Survey released this morning found.

Inflation is also a global problem right now – in America it climbed to 8.5% last month, a 40-year high, as gasoline and food prices jumped.

And overnight, it has prompted New Zealand’s central bank to raise interest rates by half a percentage point, its biggest increase in 22 years, after inflation there hit 5.9%