UK inflation could reach 18.6% next year according to Citi Bank

In the United Kingdom, inflation could reach 18.6% in early 2023 due to the expected increase in energy bills, according to a study by US bank Citi. This screening caused a stir in the UK. The country is in the midst of a campaign for the succession of Prime Minister Boris Johnson and a serious cost of living crisis grips the country.

In July, the house of prices will drop to 10.1% over an year, even more after 40 years in the country, and the Bank of Angleterre will increase to 13% in October and will go into recession from the end of the year. On Friday, the energy regulator, Ofgem, is due to announce the increase of the maximum electricity prices in the UK for October.

fuel poverty

In the wake of the war in Ukraine and restrictions on gas and oil supplies from Russia, this ceiling should rise from the current £1,971 a year to more than £3,500 in October according to experts. By some estimates, it could go up to £5,000 or even £6,000 per year in April.

According to a study published earlier this month by the University of York, more than half of UK households will be living in energy poverty next year, that is, they will no longer have the means to heat themselves adequately, even taking into account account existing aid. promised by the current government.

The favorite to succeed Boris Johnson, Liz Truss, has so far refused to promise direct aid, opting instead for tax cuts. His rival, Rishi Sunak, wants direct aid to help the poor pay their bills, speaking of “moral responsibility” and accusing Mrs Truss of being about to plunge the country into an “inflationary spiral” if she agrees to Downing Street. More than 80% of large or single-parent families and retirees will be in energy poverty, according to the York study.

The Dutch TTF futures contract, a benchmark for the European natural gas market, touched 295 euros per megawatt hour (MWh) on Monday, a level not seen since the very volatile sessions of the first weeks of the Russian invasion of Ukraine in mid March. and is approaching its all-time record. On the contrary, the price of oil is falling due to the increasingly tangible risks of recession.