Future Retirement Success
  • Politics
  • Business
  • Investing
  • Stocks
  • Politics
  • Business
  • Investing
  • Stocks

Future Retirement Success

Business

Prepare for 15% inflation next year, Britain warned

by August 4, 2022
August 4, 2022
Prepare for 15% inflation next year, Britain warned

Inflation could reach 15 per cent early next year, a leading think tank warned yesterday, as soaring gas prices exacerbate the UK’s cost of living crisis.

The Resolution Foundation said the Bank of England’s inflation forecasts were likely to be revised upwards in the light of new projections on the price of wholesale gas. Previously, the central bank has said it sees inflation topping 11 per cent in October. City analysts expect it to go even higher, at 12 per cent.

As a consequence, the think tank said, it expected the Bank to announce the largest interest rate rise in 27 years. Economists also expect an increase of between 0.25 and 0.75 per cent.

Andrew Bailey, the Bank of England governor, has made it clear that while a 0.5 percentage point increase in interest rates is “not locked in”, it will be “among the choices on the table” when the monetary policy committee makes its decision today.

Since December, the bank has raised interest rates in 0.25-percentage-point increments, but pledged in June to act “forcefully” if needed in response to inflationary pressures. If the bank’s committee does raise its central benchmark rate to 1.75 per cent, it will be the sharpest increase in borrowing costs for more than a quarter of a century.

Analysts have suggested that the final decision will be finely balanced as inflationary pressures are weighed against the rising risks of recession.

Rishi Sunak intends to use the bank’s announcement to push his argument that inflation must be brought under control before it is safe to cut taxes.

“If we rush through premature tax cuts before we have gripped inflation, all we are doing is giving with one hand and then taking away with the other,” he said. “That would stoke inflation and drive up interest rates, adding to people’s mortgage payments. And it would mean every pound people get back in their pockets is nothing more than a down payment on rising prices.”

In its report, the Resolution Foundation said current expected gas prices for this winter are close to 50 per cent higher than they were in the aftermath of the Russian invasion of Ukraine. The energy price cap is now expected to rise to £3,358 in October and then go up again to £3,615 in January 2023. High gas prices also push up electricity prices, with both leading to increased costs for businesses and consumers that feed inflation.

Jack Leslie, a senior economist at the foundation, said while some other commodity prices had fallen in the past month, the cost of gas was weighing on inflation projections.

“The outlook for inflation is highly uncertain, largely driven by unpredictable gas prices, but changes over recent months suggest that the Bank of England is likely to forecast a higher and later peak for inflation — potentially up to 15 per cent in early 2023,” he said.

“While market prices for some core goods — including oil, corn and wheat — have fallen since their peak earlier this year, these prices haven’t yet fed through into consumer costs and remain considerably higher than they were in January.

“With gas prices continuing to reach record levels, both households and businesses will see large increases in their energy bills throughout the winter and into 2023. How long this high inflation will last is hugely uncertain, but the cost of living crisis looks set to last longer and hit households harder than previously anticipated.”

Read more:
Prepare for 15% inflation next year, Britain warned

0
FacebookTwitterGoogle +Pinterest
previous post
Post covid footfall gains are wiped out as shoppers stay at home
next post
Ads for two UK funeral firms banned over ‘misleading’ eco-friendly claims

You may also like

Sterling plunges to lowest level against the US...

September 8, 2022

Homebuyer Conveyancing: The Best Approach to Obtain Accurate...

November 17, 2023

Bahrain’s Mumtalakat Holding Company Assumes Full Control of...

March 22, 2024

Fresh turkey prices rise 45% after shortages from...

December 14, 2022

Ringover raises €20M to revolutionise sales performance and...

June 7, 2023

What Are Hydroponic Systems and How Can They...

December 22, 2022

Fuel Ventures backs PlanningHub’s AI-powered solution to modernise...

February 17, 2025

IMF warns UK government debt market is vulnerable...

May 28, 2025

Heathrow welcomes record passengers as third runway plans...

February 26, 2025

British Virgin Islands accused of ‘shameful’ bid to...

February 5, 2025

    Get free access to all of the retirement secrets and income strategies from our experts! or Join The Exclusive Subscription Today And Get the Premium Articles Acess for Free

    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Recent Posts

    • Claim Trump nixed top Musk ally from NASA post over Dem donations belied by ex-Dems on team

      June 6, 2025
    • House Budget chairman explains why there’s no ‘pork’ in Trump tax bill after Elon Musk attacks

      June 6, 2025
    • Silver’s Surge is No Fluke—Here’s the Strange Ratio Driving It

      June 6, 2025
    • Friday Feature: Incubate Debate

      June 6, 2025
    • Risch urges ‘top to bottom’ USAID spending review after waste, fraud exposed

      June 6, 2025
    • Universities in Libertarian Land

      June 6, 2025

    Categories

    • Business (8,149)
    • Investing (2,013)
    • Politics (15,547)
    • Stocks (3,131)
    • About us
    • Privacy Policy
    • Terms & Conditions

    Disclaimer: futureretirementsuccess.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2025 futureretirementsuccess.com | All Rights Reserved