Report Summary

Period covered: March 2026

3 minute read

Note: This report summary is one or two months behind the current month as standard reporting practice. The content is indicative only and incomplete with certain data undisclosed. Subscribe to access this data or take out a free 30-day subscription trial now.

Inflation

Headline inflation moves higher: CPI rose to xx% YoY in March, up from xx% in February, with monthly price growth picking up compared with last year.

Core inflation eases, but pressures persist: Core CPI edged down to xx% YoY. Goods inflation strengthened to xx%, while services moved higher to xx%, as underlying pressures remain concentrated in labour-intensive areas.

Fuel drives the shift: Transport inflation accelerated to xx% YoY, with petrol and diesel both increasing significantly on the month, resulting in the sharpest rise in motor fuel prices since January 2023. Air fares also rose by xx%, compared with a fall of xx a year ago, adding further upward pressure to the category.

Clothing swings back into deflation: Clothing and footwear fell by xx YoY, from February’s xx growth. Prices rose on the month as new season ranges arrived, but the increase was far weaker than last year as discounting was used to stimulate demand across the category.

Food inflation edges up again: The annual rate of food inflation increased to xx from xx in February, with prices rising on the month. Upward pressure came from confectionery, meat and soft drinks, outweighing easing in staples such as bread and dairy.

Housing costs tick higher: Inflation rose slightly to xx, driven by a sharp increase in domestic heating oil prices as energy-related components start to push the category higher again.

Supply chain costs rise: Producer input prices rose sharply, with output prices also picking up due to the renewed build-up of cost pressures. Higher energy and commodity costs are starting to work through production and pricing, increasing pressure on manufacturers’ margins.

Inflation outlook: The near-term outlook for inflation still points to some easing, with headline inflation likely to drift lower into the spring as last year’s price rises fall out of the comparison.

Energy markets have risen quickly following the escalation in the Middle East, and those higher costs are already feeding into fuel and will move through utilities and food supply chains over the coming months. The July update to the energy price cap is the key moment, with current pricing pointing to a noticeable rise in household bills.

Inflation is set to climb again in the second half of the year, with a peak in the region of xx forecast.

Markets have shifted to price in tighter policy, but the bar for rate increases remains high. Policymakers are likely to wait to see whether higher energy costs translate into broader and more persistent inflation before reacting.

The period of relief for households at the start of the year is fading. Our latest shopper sentiment survey shows concern about inflation has picked up, with xx of consumers now worried, up from xx in January.

There is already a shift in behaviour, with almost three-fifths expecting to cut back on discretionary spending over the next three months in response to recent global events. As cost pressures feed through into consumer decision-making, spending is set to become more defensive again, weighing on the retail sector.

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CPI rose to 3.3% YoY in March, up from 3.0% in February, with monthly price growth picking up compared with last year.