Home News Goldman warns UK inflation could top 20% as recession nears
Our website publishes news, press releases, opinion and advertorials on various financial organizations, products and services which are commissioned from various Companies, Organizations, PR agencies, Bloggers etc. These commissioned articles are commercial in nature. This is not to be considered as financial advice and should be considered only for information purposes. It does not reflect the views or opinion of our website and is not to be considered an endorsement or a recommendation. We cannot guarantee the accuracy or applicability of any information provided with respect to your individual or personal circumstances. Please seek Professional advice from a qualified professional before making any financial decisions. We link to various third-party websites, affiliate sales networks, and to our advertising partners websites. When you view or click on certain links available on our articles, our partners may compensate us for displaying the content to you or make a purchase or fill a form. This will not incur any additional charges to you. To make things simpler for you to identity or distinguish advertised or sponsored articles or links, you may consider all articles or links hosted on our site as a commercial article placement. We will not be responsible for any loss you may suffer as a result of any omission or inaccuracy on the website.

Goldman warns UK inflation could top 20% as recession nears

by jcp
Editorial & Advertiser disclosure
gawdo

LONDON/HONG KONG (Reuters) -Inflation in Britain could exceed 20% early next year if spiralling gas prices fail to come down, economists from U.S. investment bank Goldman Sachs warned, adding that a recession was on the way.

Last week Britain’s energy regulator said power bills will jump 80% to an average of 3,549 pounds ($4,188) a year from October, plunging millions of households into fuel poverty and leaving businesses at risk unless the government steps in. [nL8N3020Z2]

“In a scenario where gas prices remain elevated at current levels, we would expect the price cap to increase by over 80% in January (vs 19% assumed in our baseline),” Goldman economists said in a research note.

“(This) would imply headline inflation peaking at 22.4%, well above our baseline forecast of 14.8%.”

Last week economists from Citi said consumer price inflation was set to peak at 18.6% in January, more than nine times the Bank of England’s target.

Goldman said it expected a recession to begin in the fourth quarter, with the economy set to contract by 0.6% in 2023 as a whole – gloomier than the Reuters poll consensus for growth of 0.2% but less severe than the 1.5% drop predicted earlier this month by the Bank of England.

The BoE looks set to raise interest rates by 50 basis points to 2.25% next month, Goldman said, adding that it saw upside risks to its forecasts for additional 25 basis-point hikes in following policy meetings.

(Reporting by Andy Bruce, Alun John and Tom Westbrook; Editing by William Schomberg and Kim Coghill)

www.gawdo.com

You may also like