Inflation stayed at 3% within the newest figures, however consultants warn they do not issue within the profound financial impacts of the Iran struggle.
The struggle within the Center East has unleashed financial ache internationally. (Picture: Getty)
Inflation within the UK remained at 3% within the 12 months to February this 12 months, information launched on Wednesday exhibits, however consultants have warned of “impending doom” when the affect of the Iran struggle is factored in subsequent month. The three% rise within the Shopper Costs Index (CPI), which provides a snapshot of the tempo of value will increase at a given time, was unchanged from the 12 months to January, Workplace for Nationwide Statistics (ONS) figures confirmed.
On a month-to-month foundation, it rose by 0.4% in February 2026, the identical fee as in February final 12 months. The Financial institution of England (BoE) anticipates inflation to rise over the following few months and held its base fee at 3.75% final Thursday. The ONS’s chief economist, Grant Fitzner, mentioned: “After final month’s slowdown, annual inflation was unchanged. The biggest upward driver was the worth of clothes, which rose this month however fell a 12 months in the past. This was offset by falls in petrol prices, with costs collected earlier than the beginning of the battle within the Center East and subsequent rise in crude oil costs.
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“A fall in the price of alcoholic drinks resulting from promotional exercise, in contrast with an increase final 12 months, was additionally a downward driver, whereas little change in meals costs, once more in contrast with a small rise this time final 12 months, added additional downward strain.”
However the nationwide statistical institute famous that these figures are earlier than struggle broke out within the Center East in late February, so subsequent month’s figures will value in rising petrol prices.
The battle rages on with no signal of abating, as a lot as US President Donald Trump insists Iran desires a deal “so badly”.
Iran retaliated towards the US-Israeli assaults by focusing on US bases within the area. It additionally successfully closed the Strait of Hormuz – an important international commerce route – to the 2 nations and their allies, sending oil costs skyrocketing. Petrol costs are actually over 144p a litre – up 12p because the begin of the struggle on February 28.
Ben Perks, managing director at Orchard Monetary Advisers, mentioned April will see what some have dubbed “Trumpflation” come to the UK, as per Newspage.
“That is merely the quiet earlier than the storm. It does not take into consideration the upcoming doom that is incoming within the type of war-fuelled inflation. The CPI information is pre-Iran battle, and Trumpflation hadn’t taken maintain of the UK when this information was being collated.
“As costs climb over the approaching weeks and months, I’d anticipate to see a pointy rise within the figures within the subsequent set of information. Only a month in the past, Andrew Bailey was hopeful of a return to 2% inflation; now, we’re staring down the barrel of the cost-of-living disaster 2.0.”
Craig Fish, director at Lodestone Mortgages, mentioned the BoE is “caught between a rock and a tough place”.
“February’s inflation figures got here in as anticipated at 3%, however that is virtually irrelevant now,” he continued. “These numbers predate the battle within the Center East, and the Financial institution of England has already flagged CPI may climb towards 3.5% by Q3.
“Core at 3.2% exhibits underlying strain is not going wherever both. The two% goal appears like a distant reminiscence proper now. Price cuts? Do not maintain your breath. With swap charges jittery and international uncertainty ratcheting up, the Financial institution of England is caught between a rock and a tough place.
“Do they maintain and danger choking the financial system, or minimize and danger reigniting inflation? Mortgage holders hoping for reduction in 2026 have to plan for charges staying larger for longer than anybody wished.”
Rohit Kohli, director at The Mortgage Cease, mentioned core inflation is proving sticky – even with out the impacts of the struggle feeding into the figures subsequent month.
“This inflation determine is already outdated,” he warned. “The ONS collected costs earlier than the Center East struggle broke out. Briefly, the oil value spike and market jitters are invisible, at the very least for now.
“Worryingly, core inflation truly rose, whereas companies inflation continues to be sticky at 4.3%. The Financial institution of England held its charges final week as a result of they noticed this coming. First-time consumers and anybody rolling off a repair have to cease ready for the appropriate second, as it might not come.”
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