News Tech: According to a recent prediction by Citigroup, UK inflation is expected to reach 18.6% in January 2023, the highest peak in fifty years.
The research stated that the nation’s retail energy price cap, which regulates the annual cost of electricity and heating for homes, will increase from its current level of AED1,971 to £4,567 (AED19,756) in January 2023 and £5,816 in April 2023.
The record-breaking increase in the consumer price index (CPI) inflation was attributed by the investment bank to skyrocketing wholesale gas costs. According to The Financial Times.
Inflation will “reach the stratosphere” as a result of the price rises, the bank predicted.
UK and European wholesale natural gas prices are already trading at close to 10 times normal levels and other forecasters have also raised their inflation predictions.
“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,” Nabarro said.