UK consumer price index to peak in early 2023 at 18% – nine times the UK central bank’s stated target. Bank of England – analysts at the US bank Citi predict as a possibility, based on the recent jump in energy prices.
“The question now is what monetary policy can simultaneously reduce inflation without inflicting a heavy blow on the real economy,” the bank said in a note to clients.
In Britain, inflation has been over 18% since 1976.
With inflation expected to peak higher than the BoE’s last forecast, which saw it at 13%, its Monetary Policy Committee is expected to assess the risks of perpetuating inflationary pressures to intensify.
“This means a rate hike deeper into the territory of monetary tightening,” Citi analysts said, pointing to possible rates in the 6%-7% range.
Source: Capital
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