Prices are rising by 7% a year in the UK - the highest rate for 30 years.
The Bank of England has warned inflation might reach 10% within months, as the price of fuel and food puts pressure on household budgets.
Why has inflation risen so much?
Inflation is the increase in the price of something over time. For example, if a loaf of bread costs £1 one year and £1.07 the next year, then that's an annual inflation rate of 7%.
Fuel costs are the biggest contributor to inflation at present. Average petrol prices rose 12.6p per litre between February and March, the largest monthly rise since records began in 1990
Household fuel bills have also soared: about 18 million households on standard tariffs saw their annual bill jump from £1,277 to £1,971 on 1 April - an average increase of £693
The rate of VAT - the tax paid when buying goods and services - has also gone up for some businesses. The government reduced VAT for hospitality and tourism firms during the pandemic, but on 1 April it returned to the standard 20% rate
Regulated rail fares have gone up by up to 3.8% in England and Wales, the highest fare rises for nine years
Higher interest rates also make mortgage payments more expensive for some homeowners
The headline inflation rate is an average, and price rises in different areas rise at different rates. One food industry boss has warned that food prices could rise by up to 15% this year.
What's happening to wages?
Average pay increases aren't keeping pace with inflation.
Figures from the ONS show that wages rose by 3.8% between November and January. But when you take inflation into account, regular pay actually fell by 1% compared to 12 months ago.
Some parts of the economy facing staff shortages as a result of Brexit and the pandemic have increased staff pay.
On 1 April, the lowest-paid saw the National Living Wage rise by 6.6% to £9.50 an hour, which is higher than the current inflation rate.
However, since that date, anyone earning more than £9,880 per year (£12,570 from July) has had to pay 1.25p more in the pound in National Insurance contributions as a result of the new Health and Social Care Levy.
Who measures the UK's inflation rate?
Inflation is a measure of the rate at which a range of prices are rising over a given period of time.
In the UK, this is worked out by the Office for National Statistics (ONS), which notes the prices of hundreds of everyday items, known as the "basket of goods".
This is constantly updated. In 2022, items such as tinned beans and sports bras were added, reflecting a rising interest in plant-based diets and exercise.
The ONS releases its inflation figures each month, showing how much these prices have risen since the same date last year. This is known as the Consumer Prices Index (CPI).
Inflation rose by 7% in the 12 months to March, up from 6.2% in February.
The Bank of England has warned that UK inflation could reach 10% in the last three months of 2022, largely as a result of rising global energy prices.
What can be done to tackle inflation?
The Bank of England's traditional response to rising inflation is to raise interest rates. This can benefit savers, but means some people with mortgages see their monthly payments go up.
The idea is that when borrowing is more expensive, people will have less money to spend. As a result, they will buy fewer things and prices will stop rising as fast.
But when inflation is caused by external forces, such as rising global energy prices, then there is a limit as to how effective UK interest rate rises can be in curbing inflation.