Inflation stays on hold - but Iran war could push prices up

Inflation remained unchanged at 3% last month.

On the face of it, that looks like good news and suggests that the rate of price increases is stable.

But the figures for February don’t reflect the impact of the US-Israel war in Iran, which began at the very end of the month.

The conflict has changed the economic picture completely, causing global oil prices to surge and fuelling fears of a rise in inflation this year.

And that could, in turn, delay any possible interest rate cuts.

Ultimately, the economic impact will depend largely on how long the war continues, and the markets have been up and down amid mixed reports of ongoing peace talks.

Rest assured that we’ll be keeping a close eye on what’s going on in the Middle East and here to let you know what it will mean for you and your money.

What is inflation?

Inflation is a measure of how quickly prices are increasing.

So if inflation goes up, your money doesn’t stretch as far when you’re paying for goods and services.

And if inflation goes down, prices are still going up - just at a slower rate.

The Office for National Statistics tracks inflation by comparing the prices of a virtual shopping basket each month, containing everyday items like bread and milk, along with bigger purchases like cars and televisions.

The headline inflation figure shows us how much the price of what’s in the basket has changed.

Worried about rising bills?

If you’re worried about how rising costs could affect your finances, it can help to see the bigger picture.

Our free and interactive household bills calculator gives you a personalised forecast of how your monthly costs could change.

It only takes a couple of minutes to use and shows how bills may change based on where you live.

Get on top of your budget

The government has acknowledged that the longer the Middle East conflict goes on, the more likely it is to affect household finances.

And any possible support looks set to be targeted rather than available to everyone.

So it’s also worth making sure you know how much money you have coming in and how it’s being spent.

By looking at your income and outgoings, you can work out where savings can be made and prioritise money for essential expenses like bills.

Check out our guide to how to create a budget to get started.

And give our budget planner a try - it’s free and easy to use.

Find out what benefits you can claim 

You might be able to claim financial support from the government to help you with your living costs.

Use our benefits calculator to see what you could be eligible to receive. 

Get help with your debts

If you’re feeling weighed down by debt, get in touch for confidential, practical and impartial debt advice.