Car insurance premiums fuel inflation

Sharp rises in car insurance premiums piled further pressure on household budgets last month as inflation remained at its highest level since last May.

By The Newsroom

Published 17th Apr 2013, 01:01 BST

The Office for National Statistics (ONS) said Consumer Prices Index (CPI) inflation stayed at 2.8 per cent in March after a 5.8 per cent increase in the cost of transport insurance offset slower rises in diesel and petrol prices.

While inflation remained unchanged on February, there are fears over a summer of financial pain for consumers ahead as economists predict CPI to hit  3.5 per cent over the next few months.

The ONS said price hikes for digital cameras, books and DVDs also kept CPI stubbornly above target last month, while the recent round of energy bill increases added to inflationary pressures.

But inflation eased at the fuel pumps as petrol prices rose by 2.2p a litre against 3.3p a litre a year earlier. Diesel increased by 1.9p a litre compared with 2.6p last March.

Office for National Statistics