Inflation rose to 7% in the year to March, the highest rate since 1992, and up from 6.2% in February.
As a sharp increase in petrol and diesel costs causes prices to rise at their fastest rate for 30 years, there is pressure on the government to do more to help those struggling, said the BBC.
There is also growing anxiety over the impact of the wider cost-of-living crisis, with the public increasingly keen to learn when it will end. Here is what the experts are saying.
The Bank of England said it expects the rate of inflation to “fall considerably” over the next couple of years and “to be around our 2% target in two or three years’ time”.
However, it is expected to rise before any fall begins. Indeed, noted the Financial Times, inflation in March was higher than the rate of “around 6%” that the Bank of England forecast at its last meeting. The Bank has admitted that inflation could rise further in the autumn when the energy cap is next adjusted.
The energy price cap, the maximum amount a utility company can charge an average customer in the UK for the amount of electricity and gas they use, has already risen from £1,277 to £1,971 per year, an increase of £693.
And things could get worse within months. The latest forecasts for energy prices make “grim reading”, wrote Alex Finnis for The i, because the cap is expected to soar even further at the next update in October.
Investment firm Cornwall Insight, which previously accurately predicted April’s increase, said the cap will jump by another £629 this winter, reaching £2,600 per year on average for customers on standard default tariffs.
Meanwhile, hopes are fading that prices could fall substantially in 2023. Cornwall Insight believes the price cap will finally drop next spring, but only to about £2,040 – which is higher than the current figure.
British Gas owner Centrica predicted in January that “high gas prices will be here for the next 18 months to two years”.
A similar note is being sounded on fuel. Experts have predicted that high fuel costs will be with us for the “foreseeable future”, said Auto Express.
It explained that Russia is one of the world’s largest producers of oil and gas, “so any disruptions to its production processes,” such as the war in Ukraine, have “a global impact”.
However, it added, energy costs have been high “for the best part of a year already” because demand surged as the world emerged from Covid lockdowns.
Is there a way out? Not any time soon. Relatively low barrel prices in recent years have put plans to drill for new reserves on hold. Even if a decision is made to explore new reserves, it can take years for new wells to come on stream in the volumes required to affect the market.
Help from the Treasury
With the outlook so bleak, pressure is growing on the government to do more to help people. Opposition MPs, anti-poverty campaign groups and the TUC said the Treasury should increase the financial support on offer to households and businesses.
The chancellor has promised a 1p cut in the basic rate of income tax in 2024, hailing it as a “tax cut for workers, for pensioners, for savers” and a “£5bn tax cut for over 30 million people”.
However, Labour’s Treasury spokesperson, Pat McFadden, told The Guardian that “at a time like this, Rishi Sunak could have chosen a one-off windfall tax on huge oil and gas company profits to cut household energy bills by up to £600.”
Instead, said McFadden, “he’s decided to make Britain the only major economy to land working people with higher taxes in the midst of a cost-of-living crisis.”