Inflation could push past the seven per cent mark this year, economists have cautioned, as living costs swell.
The new year could bring the highest levels of inflation since the 1990s, economists told The Times, after prices rose by 5.1 per cent in the year to November.
More than a third of economists forecast inflation to peak between six and 6.5 per cent, while 15 per cent of those polled expect it will rise beyond 6.5 per cent.
Two economists, including a former Bank of England (BoE) rate-setter, warned that inflation would top 7 per cent.
In a bid to reel in runaway price hikes, the BoE increased the base rate from 0.10 per cent to 0.25 per cent last month.
The World Bank’s chief economist Carmen Reinhart echoed the sentiment at the end of December, telling The Telegraph that the emergence of a new strain of Covid-19 and historically high inflation could plunge the world’s leading economies into double dip recessions.
“I think the concerns of double dips are very real,” she warned. “The combination of Omicron and rising inflation and a lot of uncertainty about inflation is also a global concern, and it’s important in having any confidence about recovery. In other words… we’re in for more disappointments.”