The Digester
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UK inflation steady at 3% in February ahead of Iran-linked energy shock

UK consumer inflation held at 3% in February, in line with expectations but above the 2% target, while a Middle East conflict has driven energy costs higher and altered the outlook for Bank of England policy and government support.

Mar 25th 2026 · United Kingdom

Insights

  • Consumer prices index remained at 3% in February, matching forecasts and above the 2% target.
  • The Middle East conflict has pushed up oil and gas prices after disruption around the Strait of Hormuz.
  • Bank of England policymakers paused and left interest rates on hold at the last monetary policy meeting.
  • Markets now expect the next UK interest rate move to be an increase rather than a cut.
  • Chancellor Rachel Reeves is reviewing options for targeted household support against higher future energy bills.

Sources