<p>Investment bank Citi has warned that surging energy bills will drive UK inflation to over 18 per cent early next year.</p>

<p>Due to extremely painful rises in energy bills that will push the cost of living into the “stratosphere” CPI inflation will hit 18.6 per cent in January 2023, according to Citi.</p>

<p>While the price cap on energy bills across&nbsp;Britain is currently £1,971, it will jump to £5,816 in April next year.</p>

<p>''Our latest estimate, updated for the further 25 per cent and 7 per cent rally in UK gas and electricity prices last week, points to a further upside shift in UK inflation,'' Benjamin Nabarro, chief UK economist at Citi, told clients.</p>

<p>''Accounting for these developments, as well as updating our own weights for CPI/ RPI and honing our own accounting for curve backwardation, we now expect CPI inflation to peak at over 18 per cent in January. RPI inflation, we think, will peak at over 20 per cent,'' he added.</p>

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<p>At a 40-year high, CPI inflation jumped to 10.1 per cent in July and the question now is what policy may do to offset the impact on both inflation and the real economy.</p>

<p>''For now, we think [Liz] Truss’s comments point to only a limited offset for headline inflation. Though the risks remain skewed towards further support,'' said Nabarro.</p>

<p>When the energy price cap is lifted, UK inflation will peak at over 13 per cent this autumn, according to a forecast by the Bank of England.</p>

<p>As Russian President Vladimir Putin ''weaponised'' Russia’s energy supplies, wholesale gas prices have continued to rise through August in Britain.</p>

<p>After Russian oil giant Gazprom announced it is preparing to shut down its Nord Stream 1 pipeline for three days, oil prices surged further.</p>

<p><em>(With inputs from agencies)</em></p>

<p><strong>Watch WION's live TV here:</strong></p>

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Investment bank Citi has warned that surging energy bills will drive UK inflation to over 18 per cent early next year. Due to extremely painful rises in energy bills that will push the cost of living into the “stratosphere” CPI inflation will hit 18.

Investment bank Citi has warned that surging energy bills will drive UK inflation to over 18 per cent early next year. Due to extremely painful rises in energy bills that will push the cost of living into the “stratosphere” CPI inflation will hit 18.6 per cent in January 2023, according to Citi. While the price cap on energy bills across Britain is currently £1,971, it will jump to £5,816 in April next year. ''Our latest estimate, updated for the further 25 per cent and 7 per cent rally in UK gas and electricity prices last week, points to a further upside shift in UK inflation,'' Benjamin Nabarro, chief UK economist at Citi, told clients. ''Accounting for these developments, as well as updating our own weights for CPI/ RPI and honing our own accounting for curve backwardation, we now expect CPI inflation to peak at over 18 per cent in January. RPI inflation, we think, will peak at over 20 per cent,'' he added. × At a 40-year high, CPI inflation jumped to 10.1 per cent in July and the question now is what policy may do to offset the impact on both inflation and the real economy. ''For now, we think [Liz] Truss’s comments point to only a limited offset for headline inflation. Though the risks remain skewed towards further support,'' said Nabarro. When the energy price cap is lifted, UK inflation will peak at over 13 per cent this autumn, according to a forecast by the Bank of England. As Russian President Vladimir Putin ''weaponised'' Russia’s energy supplies, wholesale gas prices have continued to rise through August in Britain. After Russian oil giant Gazprom announced it is preparing to shut down its Nord Stream 1 pipeline for three days, oil prices surged further. (With inputs from agencies) Watch WION's live TV here: ×

Citi warns UK inflation to hit 18% as energy bills rocket

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Citi warns UK inflation to hit 18% as energy bills rocket