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4h ago

Fuel Shock Pushes UK Inflation to 3.3% as Japan’s Core Prices Reach 1.8%

Central banks face higher energy costs tied to the Iran conflict that risk lifting prices further.

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A vendor works at a shop selling sushi rolls at Tsukiji Outer Market in Tokyo, Japan, February 16, 2026. REUTERS/Kim Kyung-Hoon

Overview

  • UK inflation accelerated to 3.3% year on year in March after Wednesday’s ONS release, with fuel, food and airfares leading the rise.
  • Petrol rose 8.6 pence per litre in March and diesel jumped 17.6 pence, lifting transport inflation to its fastest pace since late 2022.
  • Economists expect the Bank of England to hold rates for now, with some relief from April’s lower Ofgem energy cap offset by dearer fuel.
  • Japan’s core CPI reached 1.8% in March on Friday’s data, and the BOJ is expected to keep rates at 0.75% next week while warning that war-driven energy costs could re-ignite inflation.
  • The Iran conflict has squeezed flows through the Strait of Hormuz, a key route for about a fifth of global oil and gas, pushing up pump prices that are prompting more EV enquiries, forcing taxi drivers to work longer hours, and leading the food industry to warn of 9% to 10% inflation by late 2026 as costs pass through.