Even prior to the invasion of Ukraine, a combination of booming global demand, Covid-battered supply chains and an energy crunch were set to push UK inflation past 7pc.
But since Russian troops stormed their neighbouring country, global commodities prices have soared by more than 14pc – the fastest weekly jump in more than 50 years of data by S&P. The cost of everything from bread, to cars and home extensions are set to be hammered.
Here is what it means for household budgets:
Food
Ukraine and Russia are collectively responsible for almost one-third of global wheat supply.
The cost of the staple grain is up by more than 75pc so far this year globally, while corn and soybeans are more than one-third higher.
This is set to push up the price of groceries: food price inflation will hit 11pc in September, according the Centre for Economics and Business Research (CEBR), with no respite in costs beyond then.
With wheat responsible for around 15pc of the cost of a loaf of bread, estimates CEBR’s deputy chairman Douglas McWilliams, a typical unit will rise from £1.20 to £1.30 if prices stay up by around 50pc. The physical ability to stock up on sufficient supplies could also lead to shortages. Shipping lines are considering cancelling stops at ports in Russia, where key packaging materials such as aluminium are also supplied in large quantities.
Cars
Automotive factories are already suffering from a shortage of materials caused directly by Russia’s invasion.
BMW, Mini and Porsche are among those forced to suspend production at some sites amid a lack of parts from Ukraine such as wiring harnesses, which hold cabling in place.
Metals prices are soaring, meanwhile, as traders fear supplies from Russia will be cut off.
Aluminium is up more than one-third so far this year while palladium – used in catalytic converters – has risen almost 50pc. It is difficult, however, to calculate precisely how these commodity swings will affect buyers’ purse strings – even important components are small contributors to the overall cost once combined with factors including design and engineering expenses, labour and machinery.
For electric vehicles (EVs), some parts are extremely important. The rapidly growing segment of the market could slow amid shortages of materials such as nickel, of which Russia is a major producer.
Nickel contributes to one-third of the cost of a battery, while batteries make up between 30pc and 50pc of an EV’s selling price. That means that the around 30pc increase in the cost of nickel since the start of the year – and rising prices of other components – would add as much as 5pc to an EV.
It is an extra burden in a market already squeezed by a shortage of components such as microchips, and extra demand for personal vehicles through the pandemic.
The rising cost at the pump also means that running a conventional car is becoming more expensive. Petrol has hit a new record high of more than 153.3p per litre, according to the RAC, with diesel at 157.5p.
Nomura’s George Buckley estimates that a £10, or $13, rise in the price of oil typically increases petrol prices by 5pc. Since the start of February, oil has risen by $26 per barrel but petrol is up by just under 5pc – indicating it could rise again by the same amount, or 7p per litre.