“Today’s 3.3% inflation figure for March is an early signal that the Iran conflict is feeding through into official data and impacting the UK economy.

“Transport is the biggest contributor, driven by the rapid rise in fuel costs, though food and household energy inflation are yet to be captured.

“But the inflationary path also reflects cost pressures that were building long before the latest shock. BCC data in Q1 showed 73% of businesses were already citing labour costs and 54% energy costs as inflation drivers.

“With spiralling energy costs and sustained supply chain disruption, the March inflation figure is more likely to be a floor than a peak.

“The Bank of England faces a stagflationary dilemma. Cutting rates risks embedding inflation but holding or raising them could wreak major damage on an already fragile economy.

“The government’s extension of support for energy-intensive firms is a necessary step. But it must move with similar urgency on the other major cost pressures bearing down on business, particularly business rates and employer National Insurance.

“Over the longer term, the UK will only build resilience by unlocking investment, boosting exports, and harnessing the productivity potential of AI.”