Soaring petrol costs have driven inflation to levels not seen since 1992.
New statistics released by the Office for National Statistics at 7am today revealed that inflation - the rate at which prices rise - jumped by 7% in the 12 months to March, up from 6.2% in February.
Prices are rising faster than wages and there is pressure on the government to do more to help those struggling.
Inflation is expected to rise even further after the energy price cap was increased, driving up gas and electricity bills for millions.
Pressure
Since late last year, prices have been rising fast as pandemic restrictions have been eased and firms face higher energy and shipping costs which they have passed on to consumers.
Russia's invasion of Ukraine is now adding to the pain, as the price of oil and other commodities climb higher.
Chancellor Rishi Sunak said: "I know this is a worrying time for many families, which is why we are taking action to ease the burdens by providing support worth around £22bn in this financial year, including for the most vulnerable through our Household Support fund.
"We're also helping as many people as possible into work - the best way for families to gain economic security in the longer term."
Fuel price inflation
Average petrol prices stood at 160.2 pence per litre in March 2022, compared with 123.7 pence per litre a year earlier. The March 2022 price is the highest recorded.
The average price of diesel in March 2022, 170.5 pence per litre, was also the highest on record.
The 12-month rate for motor fuels and lubricants was 30.7%, the highest since before the start of the historic modelled series in January 1989.
The inflation figures for March do not yet reflect the average 54% increase in energy bills that took place from 1 April when the energy price cap was raised.
Blow for SMEs
While predictions have been swirling for some time, today’s significantly high inflation rates will come as a further blow to UK SMEs.
Indeed, the dual impact of Brexit and the pandemic already has, and in part continues, to cause significant supply chain disruption – and these record-high inflation rates do nothing to help preserve strong growth.
Russell Borthwick, chief executive of Aberdeen & Grampian Chamber of Commerce, said: "The latest data confirms that the UK is in the midst of an unprecedented inflationary surge. The upward pressure on energy and commodity prices from Russia’s invasion of Ukraine will drive consumer prices higher for longer with inflation likely peak close to 10% later this year, following the expected energy price cap rise in October.
“Soaring inflation has raised the prospect of a notable slump in economic output in the near term by weakening consumer spending and damaging firms' finances and their ability to invest and grow.
“The Government must provide urgent financial support, through the expansion of the energy bills rebate scheme, to include small firms and energy intensive businesses, and an SME energy price cap to protect smaller firms from some of the price increases.”
Similar story in America
The US inflation rate hit a fresh 40-year high in the year to March after fuel prices soared during the first full month of the Ukraine war.
Consumer prices surged by 8.5% - the largest annual gain since December 1981 - following a double-digit rise in energy prices.
Last month, President Joe Biden banned all imports of oil and gas from Russia following the invasion of Ukraine.
At the same time, US fuel prices reached new records.