The hospitality and food and drink industries are calling for action to mitigate the impact of rising inflation as March’s figure hit 3.3%.
The Consumer Prices Index rose by 3.3% in the 12 months to March 2026, up from 3% in the 12 months to February.
The largest upward effect came from motor fuels, the Office for National Statistics said. The average price of petrol rose by 8.6 pence per litre between February and March 2026, compared with a fall of 1.6 pence per litre between February and March 2025. Diesel prices rose by 17.6 pence per litre in March 2026, compared with a fall of 1.6 pence per litre in March 2025.
Overall motor fuel prices rose by 4.9% in the 12 months to March 2026 – the highest recorded since January 2023.
Kate Nicholls, Chair of UKHospitality, said:
“The inflationary impact of the conflict in the Middle East is evident in today’s figures.
“Hospitality businesses are highly exposed to increased fuel prices through the price of food, drink, transport and other key inputs. As one of the final links in the food supply chain, the sector cannot be expected to pick up the bill for increased costs down the chain.
“Hospitality is already one of the most heavily taxed sectors in the economy and there is no room to absorb further cost increases. Ultimately, it will result in price rises at the till, further driving inflation.
“The impact on consumer demand should be closely monitored, as our pubs, restaurants, cafes and hotels will be the first to feel the combined hit of increased input costs and reduced spending.
“The Government should be looking closely at how it can reduce the cost of doing business for demand-sensitive sectors like hospitality, which are uniquely exposed to these kinds of economic shocks.”
Food and non-alcoholic drink prices rose by 3.7% in the 12 months to March 2026, up from 3.3% in the 12 months to February. On a monthly basis, food and non-alcoholic drink prices rose by 0.3%.
The Food and Drink Federation (FDF) warned that it would take between seven and 12 months for cost pressures on manufacturers to feed through to consumers.
It is calling on government to introduce time-limited, bespoke Food and Drink Energy Support, modelled on the Energy Bill Relief Scheme which was introduced following the invasion of Ukraine, including a cap for energy prices for food and drink manufacturers.
Dr Liliana Danila, Chief Economist of the FDF, said:
“The clouds are gathering, but the storm has not yet broken on rising food and drink inflation. The war in Iran has delivered a cost shock that is already too large for manufacturers to absorb in full. The impact on prices will take time to work its way through the system, but it's only a matter of time before it does.
“For manufacturers, long-term contracts with suppliers and retailers mean it can take up to a year for higher costs to be fully passed through. But where products are less processed, or supply chains are shorter, prices will move more quickly. As a result, absent of any government intervention, we expect a gradual but persistent pickup in food inflation, reaching around 9–10% by the end of the year.
“This means we’re in a crucial window for action to limit the impact on shoppers. We’re working with government to look at the levers they can pull now to support food manufacturers now to soften the blow on consumers later in the year.”
Martin Sartorius, Lead Economist, CBI, said:
“Inflation ticked up in March, as the energy shock from the Iran conflict began to feed through to the UK economy. We expect the conflict to put upward pressure on households’ fuel, energy, and food bills in the coming months. While risks are tilted to the upside, at this stage it seems unlikely that inflation will rise to the same extent as during the previous energy shock in 2022.
“We continue to expect that the Bank of England’s Monetary Policy Committee will keep interest rates unchanged at its next meeting, as it waits to see how the inflationary impact of the Iran conflict develops. Persistently weak domestic activity and a looser labour market imply that rate hikes are relatively less likely in the near term, but they could still be a possibility if the conflict escalates significantly.”
