Inflation: UK could face a 'wave of starvation' says Sandher
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Energy bills, petrol and food prices have all led inflation to break records in 2022, placing people under pressure not seen in decades. The rate, calculated via the Consumer Price Index (CPI), will likely continue to grow, and Bank of England forecasters believe it could reach 13 percent in October. The prediction is one of many, with other analysts convinced it could approach 20 percent next year.
How high will inflation get?
Inflation of 13 percent would shock many Britons, pushing the rate to its highest since 1978.
But it could get worse, according to Professor Joe Nellis, deputy dean and Professor of Global Economy at the Cranfield School of Management in Bedfordshire.
He told Express.co.uk that, while “pessimistic”, such a high prediction could eventually become reality.
Professor Nellis said: “Predictions of inflation reaching 18 percent next year are pessimistic, but this could become a reality soon.
“The uncertainty is immense, and we can’t gaze into the future, but we know inflation will continue to rise until the war in Ukraine ends.”
Another figure Britons will be anxiously watching – the interest rate – is likely to rise in kind.
Professor Nellis believes the rate would move towards six percent, going beyond financial market consensus.
He said: “I anticipate another 0.5 percent rise in interest rates when the MPC next meets.
“This means interest rates are heading towards six percent and will have a knock-on impact on the energy supply.
“Fuel prices will increase, and domestic factors will quickly seep in.”
Financial markets believe the interest rate is currently heading towards four percent in 2023.
The hike, which the market predicts the Bank of England will realise by May next year, is a 2.25 percent increase on the current 1.75 percent rate.
And it is “another catastrophe in the making”, a financial expert has warned.
Richard Murphy, a professor of accounting practice at Sheffield University, wrote on Twitter that the central bank base rates “matter” as they establish “the basis for all other interest rates in the UK”.
In this respect, a sky-high interest rate would raise the amount people have to pay for their mortgages and other loans they receive.
Professor Murphy said the roughly 6.8 million households with a mortgage could find their rates rise to 5.5 percent, pressuring people already paying sky-high energy and food prices.
He warned that “very large numbers of households” may have to admit that “paying for the house they always thought to be theirs might not be possible”.
Professor Murphy added: “If you have a mortgage or are renting and you thought the energy bill cost was going to create a crisis for you, you ain’t seen nothing yet, as the saying goes.
“The insanity of the Bank of England is set to drive you into insolvency and out of your home, with nowhere to go.”
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