Economists predict that inflation will jump to 9% this week as the cost of living continues to rise for households
Economists predict that inflation will jump to 9 per cent this week as the cost of living continues to rise for households.
April’s inflation figures will be released on Wednesday, with forecasts pointing towards a significant increase on March’s 7 per cent rate.
This further blow to families will come as frustration grows among senior Tory MPs, who have accused the Bank of England of failing to keep rapidly rising inflation at bay.
Worry: The Government has been criticised for failing to do more to help ease the cost of living crisis
Chief economist at Panmure Gordon, Simon French, said he ‘wouldn’t at all be surprised’ if the rate of inflation reaches 9 per cent this week. He said the latest figures will be influenced largely by the recent surge in household energy bills. ‘There will be a big jump because the April price cap is captured within it,’ he added.
French also predicted that the UK will see inflation soon rise beyond 10 per cent, which will mean the consumer prices index will be at its highest level since the 1980s.
He said the higher that inflation goes in the short term then the more likely it will become ’embedded’ across the broader economy.
The Government has been criticised for failing to do more to help ease the cost of living crisis – and pressing ahead with deeply unpopular tax rises.
Business Secretary Kwasi Kwarteng said yesterday that there was ‘clearly’ an issue with high levels of inflation but stopped short of criticising Bank of England Governor Andrew Bailey.
Cabinet ministers are said to be questioning the Bank after it failed to ‘get things right’, according to The Sunday Telegraph.
The central bank has already warned that inflation could go above 10 per cent by the end of the year, way above its mandated target of 2 per cent. It has raised interest rates from 0.1 per cent to a 13-year high of 1 per cent in a bid to put a lid on prices.
But amid soaring inflation and higher borrowing costs, the Bank is warning that the economy could tip into recession this year.
Tory former Cabinet minister Liam Fox said it has ‘consistently underestimated the threat’ of rising inflation.