US monthly consumer prices increased by the most in 16-and-a-half years in March as Russia's war against Ukraine inflated the cost of petrol to record highs, cementing the case for a 50 basis points interest rate rise from the Federal Reserve.
The consumer price index surged 1.2 per cent last month, the biggest monthly gain since September 2005, the Labour Department said on Tuesday. The CPI advanced 0.8 per cent in February.
Tuesday's report is no surprise to the White House, which expected a sharp increase in consumer prices.
President Joe Biden's administration expected inflation to be "extraordinarily elevated due to [Russian President Vladimir] Putin's price hike," White House Press Secretary Jen Psaki told reporters during a Monday briefing.
Petrol prices on average soared to an all-time high of $4.33 per gallon in March, AAA said. While fuel was the main driver of inflation last month, food and services such as rental housing also made strong contributions.
Russia is the world's second-largest crude oil exporter. The US has banned imports of Russian oil, liquefied natural gas and coal as part of a range of sanctions against Moscow over its invasion of Ukraine.
In addition to pushing up petrol prices, the Russia-Ukraine war, now in its second month, has led to a global surge in food prices as the countries at war are both major exporters of commodities such as wheat and sunflower oil.
In the 12 months through to March, the CPI accelerated 8.5 per cent. That was the largest year-on-year gain since December 1981 and came after a 7.9 per cent jump in February. It was the sixth straight month of annual CPI readings above 6 per cent.
Economists polled by Reuters had forecast consumer prices advancing 1.2 per cent in March and vaulting 8.4 per cent year-on-year.
The strong inflation readings came after data last month showed the unemployment rate dropping to a two-year low of 3.6 per cent in March.
The US central bank in March raised its policy interest rate by 25 basis points, the first increase in more than three years. Minutes of the policy meeting published last week appeared to set the stage for big rate increases.
High inflation and the Fed's hawkish posture have left the bond market fearing a US recession, though most economists expect the expansion will continue.
Many believe March could mark the peak in the annual CPI rate but warn that inflation could remain well above the Fed's 2 per cent target at least until 2023.
Petrol prices have retreated from record highs but still remain above $4 per gallon. Last year's high inflation readings will also start falling from the CPI calculation.
Excluding the volatile food and energy components, the CPI rose 0.3 per cent after gaining 0.5 per cent in February. The core CPI increased by 6.5 per cent in the 12 months ending in March, the largest advance since August 1982, after rising 6.4 per cent in February.
Lockdowns in China to contain a resurgence in Covid-19 infections are perhaps putting more strain on global supply chains, which could keep goods prices elevated. Rising rents for housing are also expected to keep core inflation high.
Profile
Company: Justmop.com
Date started: December 2015
Founders: Kerem Kuyucu and Cagatay Ozcan
Sector: Technology and home services
Based: Jumeirah Lake Towers, Dubai
Size: 55 employees and 100,000 cleaning requests a month
Funding: The company’s investors include Collective Spark, Faith Capital Holding, Oak Capital, VentureFriends, and 500 Startups.
Bugatti Chiron Super Sport - the specs:
Engine: 8.0-litre quad-turbo W16
Transmission: 7-speed DSG auto
Power: 1,600hp
Torque: 1,600Nm
0-100kph in 2.4seconds
0-200kph in 5.8 seconds
0-300kph in 12.1 seconds
Top speed: 440kph
Price: Dh13,200,000
Bugatti Chiron Pur Sport - the specs:
Engine: 8.0-litre quad-turbo W16
Transmission: 7-speed DSG auto
Power: 1,500hp
Torque: 1,600Nm
0-100kph in 2.3 seconds
0-200kph in 5.5 seconds
0-300kph in 11.8 seconds
Top speed: 350kph
Price: Dh13,600,000
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Director: Laxman Utekar
Cast: Vicky Kaushal, Akshaye Khanna, Diana Penty, Vineet Kumar Singh, Rashmika Mandanna
Rating: 1/5
Ten tax points to be aware of in 2026
1. Domestic VAT refund amendments: request your refund within five years
If a business does not apply for the refund on time, they lose their credit.
2. E-invoicing in the UAE
Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.
3. More tax audits
Tax authorities are increasingly using data already available across multiple filings to identify audit risks.
4. More beneficial VAT and excise tax penalty regime
Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.
5. Greater emphasis on statutory audit
There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.
6. Further transfer pricing enforcement
Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.
7. Limited time periods for audits
Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.
8. Pillar 2 implementation
Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.
9. Reduced compliance obligations for imported goods and services
Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.
10. Substance and CbC reporting focus
Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.
Contributed by Thomas Vanhee and Hend Rashwan, Aurifer
The UAE squad for the Asian Indoor and Martial Arts Games
The jiu-jitsu men’s team: Faisal Al Ketbi, Zayed Al Kaabi, Yahia Al Hammadi, Taleb Al Kirbi, Obaid Al Nuaimi, Omar Al Fadhli, Zayed Al Mansoori, Saeed Al Mazroui, Ibrahim Al Hosani, Mohammed Al Qubaisi, Salem Al Suwaidi, Khalfan Belhol, Saood Al Hammadi.
Women’s team: Mouza Al Shamsi, Wadeema Al Yafei, Reem Al Hashmi, Mahra Al Hanaei, Bashayer Al Matrooshi, Hessa Thani, Salwa Al Ali.
German intelligence warnings
- 2002: "Hezbollah supporters feared becoming a target of security services because of the effects of [9/11] ... discussions on Hezbollah policy moved from mosques into smaller circles in private homes." Supporters in Germany: 800
- 2013: "Financial and logistical support from Germany for Hezbollah in Lebanon supports the armed struggle against Israel ... Hezbollah supporters in Germany hold back from actions that would gain publicity." Supporters in Germany: 950
- 2023: "It must be reckoned with that Hezbollah will continue to plan terrorist actions outside the Middle East against Israel or Israeli interests." Supporters in Germany: 1,250
Source: Federal Office for the Protection of the Constitution
Syria squad
Goalkeepers: Ibrahim Alma, Mahmoud Al Youssef, Ahmad Madania.
Defenders: Ahmad Al Salih, Moayad Ajan, Jehad Al Baour, Omar Midani, Amro Jenyat, Hussein Jwayed, Nadim Sabagh, Abdul Malek Anezan.
Midfielders: Mahmoud Al Mawas, Mohammed Osman, Osama Omari, Tamer Haj Mohamad, Ahmad Ashkar, Youssef Kalfa, Zaher Midani, Khaled Al Mobayed, Fahd Youssef.
Forwards: Omar Khribin, Omar Al Somah, Mardik Mardikian.
