Inflation rose to 4.8 per cent in March, according to the latest RPIX index – which includes all items excluding mortgage interest payments.
The latest figure represents a 0.6 per cent jump in the annual rate of inflation compared to February, when RPIX inflation was running at 4.2 per cent.
One of the biggest pressures on inflation came in a rise in housing and household goods, where prices rose slightly between February and March this year after falling 1.0 per cent in the same month last year.
Domestic gas bills were unchanged between February and March this year after falling between the same two months a year ago.
But the costs of transport (principally due to petrol and diesel pump prices and air fares) are also rising and food and non-alcoholic drinks also continue to rise in price.
Vegetable prices have risen where the weather has affected the supplies of some produce.
And clothing and footwear are up, mainly due to price increases for women’s clothing.
The only areas in which inflation is falling are furniture, household equipment and maintenance, according to the CPI inflation index.
But overall inflation, the Retail Prices Index, is rising fast.
In the year to March, RPI annual inflation was 4.4 per cent – a leap of 0.7 per cent from the 3.7 per cent annual rate in February.
The main factors affecting the CPI also affected the RPI.
Additionally, there was significant upward pressure on the RPI index from housing.
This was driven mainly by mortgage interest payments which rose by 0.7 per cent this year, but fell by 6.3 per cent a year ago.
The continuing impact of the rise in VAT, which went back up to 17.5 per cent in January, also contributed to the spike in inflation.
The latest figures are way above the Bank of England’s target of two per cent.
If inflation continues to rise sharply, the Bank’s Monetary Policy Committee will be forced into raising interest rates.
