05:29Full story: inflation hits 7% in March as Britains cost of living soars

Households in Britain have come under renewed pressure from the soaring cost of living after the official inflation rate reached 7% last month amid a record increase in petrol and diesel prices.

Figures from the Office for National Statistics showed the latest rise in the consumer prices index was the fastest in three decades, coming a month after the barometer for rising living costs jumped by 6.2% in February.

With broad-based price rises across the economy, the biggest increase came in the cost of filling up at the pump after Russias invasion of Ukraine sent the global oil price close to record levels amid concerns over supply disruption and sanctions.

Average petrol and diesel prices soared to record highs of 160.2p and 170.5p a litre respectively, rising by more than 30% over the past year the biggest annual increase since 1989.

Restaurants and hotel prices also rose steeply in March, having been unavailable last year during lockdown, while there were also rises across a number of different types of food as the cost of a weekly shop increases.

Heres the full story:

Updated at 05.35EDT

Time to wrap up... here are todays main stories, first on inflation:

...Russia...

And also:

Goodnight. GW

Updated at 13.12EDT

US Treasury secretary Janet Yellens warning to countries not to undermine sanctions against Russia came hours after data showed Chinas trade with Russia jumped by more than 12% in March from a year earlier.

That outpaced the increase in Beijings trade with the rest of the world, according to Chinese customs data.

My colleague Phillip Inman explains:

Shipments to and from Russia increased 12.76% in March to $11.67bn, Chinese customs data showed on Wednesday, slowing from 25.7% growth in February, when Russia launched its invasion of Ukraine.

The decline in trade with Russia was less severe than the decline with other countries, fuelling concerns that China has maintained strong links with Moscow despite the atrocities perpetrated by the Russian military in Ukraine.

Growth in trade during March with the rest of the world was only 7.75%, after it increased to $505bn.

Beijing has refused to call Russias action an invasion and has repeatedly criticised what it says are illegal western sanctions to punish Moscow.

European stock markets have closed little changed on the day, as concerns over rising inflation and slowing growth occupy investors minds.

The FTSE 100 index of blue-chip shares finished just 4 points higher at 7,580, with airline group IAG (+3.8%) leading the risers.

Michael Hewson of CMC Markets explains:

British Airways owner IAG shares are doing well after optimistic outlooks from its US peers Delta Airlines and American Airlines. Delta said it had seen record bookings amidst optimism that it would be profitable in each remaining quarter of the current financial year.

Supermarket shares slipped, though, with Tesco down 2% after it warned that rising prices would hit its profits, and rival Sainsbury off 2.4%.

Major housebuilders lost around 2%, after the government announced that more than 35 homebuilders have agreed to put 2bn towards fixing unsafe cladding on high-rise buildings in England identified in the aftermath of the Grenfell Tower disaster.

Michael OShea, construction partner at the law firm Gowling WLG, says the deal is a significant step in re-dressing the overall issue.

It will be interesting to see how measures around other fire safety defects - such as defective compartmentation, fire doors and other non-cladding defects which allow smoke and flames to spread are pro-actively approached by the industry moving forwards.

Whether the insurance industry now follow suits is also a key factor - ensuring that the cause and effect nature of the entire process is fully appreciated is a significant dynamic here.

The pan-European Stoxx 600 index ended the day flat, with Italys FTSE MIB 0.2% higher, but Germanys DAX slipping 0.35% as forecasters predicted a sharp recession if Germany introduced an immediate ban on Russian energy.

Updated at 13.48EDT

Annual inflation in Russia accelerated to 17.49% as of April 8, its highest since February 2002 and up from 16.70% a week earlier, the economy ministry says, following the latest rise in prices last week:

Consumer prices in Russia have jumped almost 11% so far this year, new inflation data shows.

Thats despite a softening in inflationary pressures last week, as the rouble recovered from its slump when the Ukraine war began, as Reuters explains:

Weekly inflation in Russia slowed to 0.66% in the week to April 8 from 0.99% a week earlier, taking the year-to-date increase in consumer prices to 10.83%, data from statistics service Rosstat showed on Wednesday.

In the same period a year ago, consumer prices rose 2.72%.

That follows a 7.6% jump in prices in March along, the biggest monthly increase since 1999.

Russias central bank said last Friday that inflationary pressures had eased, as it cut interest rate from 20% to 17%.

But price pressures are still intense.

Earlier today Alexei Kudrin, the head of Russias audit chamber, predicted that inflation could reach between 17% and 20% this year.

Analysts polled by Reuters late last month forecast 2022 inflation to accelerate to around 23.7%, its highest since 1999.

The Dutch bank ABN Amro has apologised for its predecessors role in the slave trade, after it commissioned an investigation into the untold suffering it caused.

The investigation, by academics at the International Institute of Social History (IISH), an Amsterdam archive, found that two of ABN Amros predecessor companies were involved in either financing the operation of slave plantations directly, or underwriting the trade in products produced by slaves.

The global Black Lives Matter protests that followed the murder of George Floyd in the US in 2020 prompted many historical institutions to re-examine their own links to slavery and the slave trade.

Heres the full story:

The heads of the World Bank, the IMF, the World Food Programme and the World Trade Organisation have called for urgent coordinated action on food security.

As the Ukraine war threatens to push millions more people into poverty, David Malpass, Kristalina Georgieva, David Beasley and Ngozi Okonjo-Iweala say the surge in the prices of staple foods, and supply shortages, are increasing pressure on households worldwide.

They urge the international community to help vulnerable countries, including though emergency food supplies, financial support to households and countries, and grants to cover urgent financial neeeds, as well as increasing agricultural production and ensuring open trade.

In a joint statement, Malpass, Georgieva, Beasley and Okonjo-Iweala say:

The threat is highest for the poorest countries with a large share of consumption from food imports, but vulnerability is increasing rapidly in middle-income countries, which host the majority of the worlds poor. World Bank estimates warn that for each one percentage point increase in food prices, 10 million people are thrown into extreme poverty worldwide.

The rise in food prices is exacerbated by a dramatic increase in the cost of natural gas, a key ingredient of nitrogenous fertilizer. Surging fertilizer prices along with significant cuts in global supplies have important implications for food production in most countries, including major producers and exporters, who rely heavily on fertilizer imports. The increase in food prices and supply shocks can fuel social tensions in many of the affected countries, especially those that are already fragile or affected by conflict.

US treasury secretary Janet Yellen has also warned that global economic growth will take a hit from Russias war in Ukraine.

Yellen noted that it had sent prices for food, energy and some metals sharply higher, fueling existing inflationary pressures (as weve seen in the UK today).

Reuters has more details:

It is likely to be a hit to global growth, Yellen told an event hosted by the Atlantic Council think tank, adding that she worried more about recession prospects in Europe, which was most vulnerable to disruptions in energy supplies from Russia.

The United States had a very strong economy, and a very strong labor market, Yellen said, but also faced strong, strong wage pressures, inflation and the potential for further supply chain pressures due to COVID-19 lockdowns in China.

US Treasury Secretary Janet Yellen will convene a meeting of top international financial officials next week to address the global food security crisis, following Russias invasion of Ukraine.

Yellen says she was deeply concerned about the impact of Russias war in Ukraine on global food prices and supply, as soaring prices threaten many millions of people with severe hunger.

Yellen said she would convene other leaders during next weeks Spring Meetings of the International Monetary Fund and World Bank to discuss possible solutions to help the poorest, who spend a larger share of their income on food.

Yellen also issued a warning to countries who havent cut financial ties with Russia or are seeking to undermine sanctions imposed due to the war in Ukraine.

In prepared remarks delivered at an event hosted by the Atlantic Council, she said:

While many countries have taken a unified stand against Russias actions and many companies have quickly and voluntarily severed business relationships with Russia, some countries and companies have not.

Let me now say a few words to those countries who are currently sitting on the fence, perhaps seeing an opportunity to gain by preserving their relationship with Russia and backfilling the void left by others. Such motivations are short-sighted.

And in a call to China to help end the Ukraine war, she said:

The worlds attitude towards China and its willingness to embrace further economic integration may well be affected by Chinas reaction to our call for resolute action on Russia.

Updated at 11.24EDT

The IMF is worried about the risks posed by decentralized finance (DeFi), the crypto-based financial networks that operate without a central intermediary.

In a new blogpost, IMF staff warn that the fast-moving fintech sector is creating challenges for effective regulation and supervision.

It cites decentralized finance, which uses secure distributed ledgers to handle transactions. Such networks have been targeted by cybercriminals, and the lack of deposit protection means customers often rush to take their money out when a cyberattack occurs.

The IMF says:

Also known as DeFi, it offers the potential of delivering more innovative, inclusive, and transparent financial services thanks to greater efficiency and accessibility.

However, DeFi also involves the buildup of leverage, and is particularly vulnerable to market, liquidity, and cyber risks. Cyberattacks, which can be severe for traditional banks, are often lethal for these platforms, stealing financial assets and undermining user trust.

The lack of deposit insurance in DeFi adds to the perception of all deposits being at risk. Historically, large customer withdrawals often follow news of cyberattacks on providers.

The IMG also points out that FinTech can push banks to innovate to remain relevant to customers, by disrupting core financial services.

For consumers, it means potentially wider access to better services. Such changes also raise the stakes for regulators and supervisorswhile most individual FinTech firms are still small, they can scale up very rapidly across both riskier clients and business segments than traditional lenders.

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UK inflation hits 7%; Yellen warns of global growth hit as it happened - The Guardian