UK inflation hits 30-year high of 7% as energy prices surge

UK inflation hits 30-year high of 7% as energy prices surge

LIVERPOOL, UNITED KINGDOM – JANUARY 23: On the day that Britain officially enters a recession shoppers walk through Liverpool city centre on January 23, 2009 in Liverpool, United Kingdom. Figures announced today confirm that the UK is officially in a recession for the first time since the early 1990s after GDP fell in two successive quarters of 2008.
Photo by Christopher Furlong/Getty Images

LONDON — U.K. inflation came in at an annual 7% in March, its highest since for 30 years.

Consumer prices rose by 1.1% month-on-month, outstripping expectations for a 0.7% climb in a Reuters poll of economists, which had projected a 6.7% annual increase. The 7% annual rise in the consumer price index (CPI) is the highest in the historic models series since March 1992.

The Bank of England has hiked interest rates at three consecutive monetary policy meetings, raising the costs of borrowing from its historic low of 0.1% to 0.75%, as it looks to contain runaway inflation without stomping out economic growth.

Central banks around the world face a balancing act between tackling soaring inflation and signs of slowing economic growth, with the Russia-Ukraine war dampening economies’ recovery from the Covid-19 pandemic.

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