Get ready for some eye-watering statistics…
The UK Consumer Prices Index (CPI) has risen to its highest level since March 1992, according to data published today by the Office for National Statistics (ONS).
Consumer prices jumped by an annual 7% in March, up from 6.2% in February. On a monthly basis, inflation went up by 1.1%, compared with a rise of 0.3% in March last year.
The annual inflation rise was higher than the 6.7% that economists had projected.
“Broad-based price rises saw annual inflation increase sharply again in March. Among the largest increases were petrol costs, with prices mostly collected before the recent cut in fuel duty, and furniture,” Grant Fitzner, ONS chief economist, said.
Meanwhile, the ONS also reported that the Consumer Prices Index, including owner occupiers’ housing costs (CPIH), rose by 6.2% in the 12 months to March 2022, also up from 5.5% in February.
The largest upward contributions to the annual CPIH inflation rate in March 2022 came from housing and household services (1.49 percentage points, principally from electricity, gas and other fuels, and owner occupiers’ housing costs) and transport (1.47 percentage points, principally from motor fuels and second-hand cars).
On a monthly basis, CPIH rose by 0.9% in March 2022, compared with a rise of 0.2% in March 2021.
Douglas Grant, chief executive at Manx Financial Group PLC, said that because of rising inflation, many SMEs will continue to struggle this year.
He suggested that the government should introduce a permanent loan scheme for SMEs.
“Having successfully deployed multiple relief schemes – BBLS, CBILS and RLS – for SMEs throughout the pandemic, the UK government should, in our opinion, now turn their attention towards a permanent loan scheme to help leverage businesses going forward,” Grant said.
“SMEs would be well-advised to take stock of their current capital structure and, if appropriate, access fixed term, fixed rate loans to prevent additional exposure to an increasingly volatile lending market.”
