{"text":[[{"start":13.56,"text":"Rising energy prices will push UK inflation to its highest pace in three years around the start of 2027, according to economists surveyed by the FT, adding to pressure on the Bank of England to raise interest rates."}],[{"start":27.52,"text":"Inflation is expected to peak at an average of 4.4 per cent, the survey of 12 economists that was conducted this week found, with most anticipating that price growth will reach its highest level in the first quarter of next year."}],[{"start":41.68,"text":"All but one respondent expected inflation to peak above 4.1 per cent, while five forecast a peak of between 4.5 and 5 per cent."}],[{"start":51.24,"text":"It comes as the BoE prepares to set out its own inflation and growth outlook at midday on Thursday after a meeting that is widely expected to agree a quarter-point increase in its key interest rate."}],[{"start":63.08,"text":"The economists’ forecasts are significantly higher than the latest projections from the Office for Budget Responsibility, published last week, which show inflation peaking at 3.8 per cent in the first quarter of next year."}],[{"start":76.04,"text":"But the OBR’s economic forecasts were based on market prices for oil and gas in mid-August, before a re-escalation in the Middle East war drove them sharply up."}],[{"start":86.04,"text":"On Wednesday, oil prices slid following a report of diplomatic progress between the US and Iran."}],[{"start":92.56,"text":"“The inflation outlook is becoming increasingly uncomfortable for the Bank of England’s Monetary Policy Committee,” said Ellie Henderson, economist at Investec and one of those surveyed, who expects inflation to peak at 4.4 per cent in February next year."}],[{"start":null,"text":"
"}],[{"start":107.6,"text":"She said that Ofgem’s energy price cap being on track to rise by over 25 per cent in January, alongside indirect effects of the oil price shock following the Iran war, was likely to feed through to the prices of other goods."}],[{"start":121.48,"text":"At the beginning of 2026 the BoE said it believed it was on track to meet its official inflation target of 2 per cent, paving the way for interest rate reductions. Instead, the outbreak of the war in Iran in late February led to skyrocketing energy prices and rising inflation."}],[{"start":138.36,"text":"UK household energy bills are set to jump by nearly £470 in January to about £2,200 a year for a typical household, according to EDF Energy’s latest estimates."}],[{"start":149.12,"text":"Inflation has already risen to 3.5 per cent in September, its highest level in almost a year. Inflation at 4.4 per cent would be the fastest since October 2023, when it hit 4.6 per cent."}],[{"start":161.92,"text":"In July, the central bank forecast inflation would peak at around 3.2 per cent in the final quarter of 2026. Robert Wood, economist at the consultancy Pantheon Macroeconomics, said the outlook has changed for the worse since then."}],[{"start":176.24,"text":"“Inflation will peak around 5 per cent based on recent energy prices and run above 3 per cent all of next year,” he predicted."}],[{"start":null,"text":""}],[{"start":183.96,"text":"OBR officials acknowledged in a press conference last week that energy prices were now “substantially higher” than those on which its economic forecasts were based and that its inflation forecast for early 2027 would have been “somewhat higher” based on current market pricing."}],[{"start":199.12,"text":"Some economists warned that persistently high energy prices could force them to revise up both their inflation forecasts and expectations for interest rates."}],[{"start":null,"text":""}],[{"start":208.6,"text":"Among economists surveyed by the FT, the most commonly expected peak for the Bank of England’s benchmark rate was 4.25 per cent, implying two quarter-point increases from its current level. But traders are fully pricing in four quarter-point increases in the rate by the end of next year."}],[{"start":225.72,"text":"“If energy prices stay high for longer or rise further, then CPI inflation may peak somewhere between 4.5 per cent and 5 per cent and a couple of ‘insurance’ interest rate hikes suddenly become a series of ‘necessary’ interest rate hikes,” said Paul Dales, economist at consultancy Capital Economics."}],[{"start":249.84,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1793864889_7587.mp3"}