Soaring energy prices are set to push UK inflation to a 50-year peak of 18.6% early next year, Citi said. Photograph: PAUK inflation is on course to hit 18.6 per cent in January — the highest in almost half a century — due to soaring wholesale gas prices, according to a new forecast from Citi based on the latest market prices.
Such a rate of inflation would squeeze household incomes hard and further push the UK economy into recession, but Mr Nabarro said the scale of the likely inflation would push the Bank of England to tighten monetary policy further. The energy regulator Ofgem will on Friday announce the energy price cap for the period between October and January, which most analysts expect to rise to more than £3,500 for a household with average usage of energy — an increase of 75 per cent on current levels.
“Even with the economy softening, last week’s data reaffirmed the continued risk of pass through from headline inflation into wage and domestic price setting could accelerate,” he said.
So glad the UK is beholden to the Tory leadership party elections and has to endure a squatter in number 10 while others sell their castles in the air. As always the Tory party comes first, because after all they won't be the ones most affected by fuel prices.