The consumer price index has surged to 7%, according to the Office for National Statistics.
Petrol and diesel prices are at highest ever recorded while energy costs skyrocket even before the new cap comes in.
Danni Hewson, AJ Bell financial analyst, comments on Consumer price inflation, UK – Office for National Statistics: “There’s no way to sugar coat what’s happening to prices. Pretty much everything is significantly more expensive than it was a year ago and there is every indication the situation is just going to get worse.
“I don’t think anyone will be surprised to learn that the price at the pump played a huge part in the March story, petrol prices were up by more than 12p a litre in a single month, diesel by more than 18p. Motorists winced every time they had to fill up their vehicles and the Chancellor’s duty cut has done little to soothe. Russia’s invasion of Ukraine has clearly played a part as real sanctions or those self-imposed, disrupted supply of oil and sent the price of a barrel of the black stuff soaring.
“Energy prices sky-rocketed too and though October’s price cap kept the worst of it in check for households’ – manufacturers, retailers, pretty much all businesses weren’t cushioned in the same way and those prices are being passed on to the consumer leaving them with difficult choices to make. And even with the price cap the cost of keeping the lights on and the home fires burning have increased, but then what hasn’t.
“Records have been breaking everywhere and the phrase “since the series began” is used over and over again in this latest update. Clothing and Footwear up 9.7%, furniture and household equipment up 10.4% and the price of doing anything nice be it enjoying a drink in the pub or taking in a show – you guessed it up by the fastest rate since the series began. Buying those things are a choice, unless you’ve got growing kids, but putting food on the table is not. Whilst the 5.9% surge isn’t quite a record breaker I doubt anyone visiting the supermarket over the next couple of days will be worrying about the distinction.
“But what’s causing most concern is the realisation that this really is just a taste of what is to come. The next set of inflation figures will reflect the shock most households have been feeling when they’ve taken a look at their new energy bill. And taking a look at the latest Producer Price Index figures there is unlikely to be any respite pretty much anywhere else. Input prices have surged by almost 20%, and if you’re keeping a tally, yes that is the highest number since records began. What’s coming out of the factory gates, the goods produced seem positively cheap by comparison but be in no doubt the near 12% hike will just add to the misery being faced by households and businesses right across the country.
“And that chip shortage, the dearth of semi-conductors which was the hallmark of post pandemic recovery has suffered another setback, a setback which is likely to further contribute to the incredible prices being sought for second-hand cars. Not only will the issues created last year – the lack of one year old vehicles coming to market continue, but with new car production still subdued transport costs are expected to feature in a similar way in the next chapter of the inflation story.
“There are no quick fixes, no magic wand to be waved. Everybody is going to feel poorer as wages, pensions and benefits all fail to keep up. But most people also understand that those with the least will be hardest hit because for some people cutting back is simply not an option.”