Higher petrol prices lead to higher inflation
The high petrol prices wrote the story of higher transport costs ultimately leading to a surprise rise in inflation. It surged to 3.4 per cent last month proving all forecasts wrong.
As per the Office of National Statistics (ONS), CPI was up from three per cent in February, mainly due to a 2.7 per cent rise in petrol prices. While higher petrol prices pushed transport costs up by 11.3 per cent, highest since 1997, communication costs went up by 4.9 per cent.
Shortage of vegetables due to the bad weather at the beginning of the year also contributed to higher inflation.
The motorists have felt the record burn of high inflation and higher petrol cost. As per AA the average cost of one liter of petrol in now 120.9p compared to last years 95.2p.
Earlier CPI index recovered to three per cent from January's 3.5 per cent, which encouraged economists to expect an inflation of 3.1 per cent in March.