UK inflation to hit 18% as energy bills rocket, warns Citi – business live

UK inflation to hit 18% as energy bills rocket, warns Citi

Surging energy bills will drive UK inflation over 18% early next year — the highest peak in almost half a century — investment bank Citi has warned.

Citi has forecast that CPI inflation will hit 18.6% in January 2023, while the RPI inflation rate will hit 21%, due to extremely painful rises in energy bills that will push the cost of living into the “stratosphere”.

Citi predicts that the price cap on energy bills across Great Britain will rise to £3,717 in October (up from £1,971 today), and then jump to £4,567 in January and then £5,816 in April.

Benjamin Nabarro, chief UK economist at Citi, told clients:

Our latest estimate, updated for the further 25% and 7% rally in UK gas and electricity prices last week, points to a further upside shift in UK inflation.

Accounting for these developments, as well as updating our own weights for CPI/ RPI and honing our own accounting for curve backwardation, we now expect CPI…

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This article was written by Graeme Wearden and originally published on www.theguardian.com