Inflation: surging fuel costs push CPI to 3.4%

Inflation pushed higher in March, rising even more than expected as costlier fuel and airline tickets ramped up price pressures, according to data from the Office for National Statistics this morning.

At 3.4%, consumer price inflation (CPI) is now way above the Bank of England's government-set target of 2%. Economists had expected that it would rise given surging energy costs but had only expected an increase to a 3.2% rate from February's 3%.

One of the major pressures in March was household gas bills. They had fallen in March 2009 and were flat in March this year, helping to ramp up the annual pace of price rises.

The annual rise in the CPI's transport component, at 11.3%, was the highest since the series began in January 1997.

The retail price inflation measure (RPI), which includes housing costs and is used as the basis for many pay deals, quickened to 4.4% from 3.7% in February. It was higher than an economists' consensus forecast for 4.2%.
In your face, Sterling!