Commenting on the Office of National Statistics Consumer Price Index March 2026 data, Adam Deasy, Economist at PwC UK, says:
“After some positive surprises in the first quarter for real GDP growth and unemployment, consumer price data for March brings us back to reality, with the early impacts of the conflict in the Middle East starting to trickle through. Headline CPI inflation increased to 3.3% from 3.0% in February, interrupting the previous downward momentum.
“This is just the first wave of the energy shock, primarily showing up in higher prices at the pump. These are prices that are quicker to respond, with the average price of diesel at its highest level since November 2023. We are yet to see the knock-on impact of price pressures in downstream or byproducts to oil and gas, such as fertiliser, helium, plastics or metals.
“These will have an uneven and staggered impact. July’s energy price cap update will be a step change, and while food inflation will come with a lag, crops grown in energy-intensive heated greenhouses such as cucumbers, tomatoes, and peppers might see price spikes sooner. Current data reflects only a small increase to air fares; but with jet fuel running low, these prices may take off soon.
“It’s straightforward to pick out exposed sectors, but the big question for the Bank of England is how contagious inflation will be. The pre-existing weakness in the economy suggests runaway inflation or wage growth is unlikely. But uncertainty over the path of the conflict brings uncertainty over prices, leaving the Bank to wait-and-see. What’s clear for now is that the only way is up.”
About PwC
At PwC, we help clients build trust and reinvent so they can turn complexity into competitive advantage. We’re a tech-forward, people-empowered network with more than 364,000 people in 136 countries and 137 territories. Across audit and assurance, tax and legal, deals and consulting, we help clients build, accelerate, and sustain momentum. Find out more at pwc.com.
© 2026 PwC. All rights reserved.
