Bankers from Goldman Sachs warned on Tuesday the annual inflation rate in the United Kingdom could surpass 20% early next year if gas prices continue to stand at elevated levels.
"In a scenario where gas prices remain elevated at current levels, we expect the price cap to increase by over 80% in January (vs. 19% assumed in our baseline). (This) would imply headline inflation peaking at 22.4%, well above our baseline forecast of 14.8%," Goldman noted in its assessment.
Commenting on the Bank of England's upcoming rate hikes, Goldman said the British central bank is expected to increase its benchmark rate by 50 basis points in September. Today's outlook comes on top of Citi's estimate inflation would reach 18.6% in January.