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\t\tInflation is set to be double the Bank of England’s target. \t<\/p>\n\t\t\tMonday 20 October 2025 10:23 am
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\t\t\tMonday 20 October 2025 12:50 pm\n\t<\/p>\n
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\t\tInflation is set to be double the Bank of England’s target. \t<\/p>\n
The UK\u2019s isolated struggles with price growth are set to hit a new milestone on Wednesday as consumer price index (CPI) inflation will surge to double the Bank of England\u2019s target rate.\u00a0<\/p>\n
In more troubling news for the Treasury and the Bank\u2019s interest rate-setters<\/a>, inflation is forecast to hit four per cent in the year to September, double the two per cent target. <\/p>\n A Bloomberg poll of economists also forecast core CPI inflation, which excludes high food and energy prices, to inch up to 3.7 per cent from 3.6 per cent the previous month.\u00a0<\/p>\n The Bank of England\u2019s central forecast also said in August it expected CPI inflation to hit four per cent.\u00a0<\/p>\n New data on Wednesday will highlight the UK\u2019s own problems in curbing inflation, with both the IMF<\/a> and OECD spelling out how it would have higher price growth levels than the rest of the G7 over the last few weeks.\u00a0<\/p>\n The OECD<\/a>\u2019s set of forecasts in September were particularly damning given it also said inflation in the UK would be above G20 average this year, which includes countries that have struggled with spiralling prices such as Argentina and Turkey.\u00a0<\/p>\n JP Morgan economist Allan Monks said services inflation was expected to accelerate in September given transport prices have remained high along with petrol prices.\u00a0<\/p>\n A decline at the same time last year is likely to put \u201cupward pressure\u201d on headline inflation.\u00a0<\/p>\n \t\t\t\t\tRead more<\/p>\n \t\t\tBank of England\u2019s Mann: Higher interest rates will lower inflation fears<\/a><\/p>\n \u201cThere may be some downside risk if communications prices and rents come in softer, more in line with their recent monthly run rate,\u201d Monks added.\u00a0<\/p>\n Reeves\u2019 battle to curb inflation<\/p>\n Analysts at Goldman Sachs warned that energy inflation would be higher in the last quarter, which is likely to keep Chancellor Rachel Reeves on edge ahead of the Budget.\u00a0<\/p>\n They also warned that energy costs will remain jumpy in the coming months given market volatility and high network charges.\u00a0<\/p>\n