UK inflation could exceed 20% early next year if gas prices do not fall, economists at US investment bank Goldman Sachs have warned, adding that a recession is on the way.
Last week, the UK energy regulator said sector bills would jump 80% to an average of £3,549 ($4,188) a year from October, affecting millions of households and leaving businesses at risk. unless the government intervenes.
“In a scenario where gas prices remain elevated at current levels, we expect the cost ceiling to increase by more than 80% in January (against 19% assumed in our baseline scenario),” Goldman economists said in a note.
Goldman said it expects a recession to begin in the fourth quarter, with the economy expected to contract 0.6% in 2023 as a whole, a bleaker forecast than a Reuters survey of 0.2% growth, but more optimistic than the 1.5% drop forecast earlier this month by the Bank of England.
Britain’s central bank looks set to raise interest rates by 50 basis points to 2.25% next month, Goldman said, adding that it sees upside risks in its forecast of a further 25-point hike at upcoming meetings. of monetary policy.
Source: CNN Brasil
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