The latest leap in wholesale gas prices means that we now think CPI inflation will rise from 10.1% in July to a peak of 14.5% in January (up from our previous forecast of a peak of 12.5% in October). But as it has become increasingly likely that the next Prime Minister will offset more of the resulting hit to household real incomes, we’re not expecting the coming recession to be any deeper. As a result, the risks to our forecast that interest rates will rise from 1.75% now to 3.00% are increasingly on the upside.
Will the UK’s next Prime Minister be able to turn around the country’s economic fortunes? Find out what our economists think in our special Drop-In on Monday, 5th September. Register here.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services