[1andrew1]

I hope this prediction does not come to pass!

Citi predicts UK inflation to hit 18.6%

Investment bank raises forecast as gas prices continue to surge


UK inflation is on course to rise to 18.6 per cent in January — the highest peak in almost half a century — due to soaring wholesale gas prices, according to a new forecast from Citi based on the latest market prices.

The investment bank predicted that the retail energy price cap would be raised to £4,567 in January and then £5,816 in April, compared with the current level of £1,971 a year — shifts it said would lead to inflation “entering the stratosphere”.

“We now expect CPI inflation to peak at over 18 per cent in January,” said Benjamin Nabarro, chief UK economist at Citi. That would be higher than the peak of inflation after the second Opec oil shock of 1979 when CPI reached 17.8 per cent, according to estimates from the Office for National Statistics.

Such a rate of inflation would squeeze household incomes hard and further push the UK economy into recession, but Nabarro said the scale of the likely inflation would push the Bank of England to tighten monetary policy further.

https://www.ft.com/content/778e65e1-...5-9d701eb29567