UK Inflation Rate Rises to 3.3% as Impact of Iran Conflict Begins to Show

On April 22, data released on Wednesday revealed that the UK’s CPI inflation rate rose from 3.0% in February to 3.3% in March, indicating an initial impact of the Middle East conflict on prices. Before the U.S. and Israel took action against Iran, the Bank of England stated that the inflation rate in the UK is likely to approach its 2% target level in April. However, last month the Bank of England significantly raised its inflation expectations due to the shock from energy prices, predicting that the inflation rate will rise to around 3.5% by mid-2026. The International Monetary Fund forecasted last week that the UK’s inflation rate will peak at 4% in the coming months. Nevertheless, most of the Bank of England’s rate setters indicated that it is still too early to determine how the overall rise in inflation will affect potential price pressures in the economy, given the current poor state of the labor market, which may make it harder for workers to demand higher wages or for businesses to pass on higher costs to consumers. (Dongxin News Agency)