British inflation will “comfortably” top five percent in April due to rocketing energy prices, well above the Bank of England’s target, a high-ranking BoE official forecast Monday.
Ben Broadbent, deputy governor for monetary policy, made the prediction ahead of a central bank policy meeting next week during which the BoE could decide to lift its historically low interest rate, or leave it intact.
Broadbent said inflation would soar further when the domestic energy price cap is hiked by UK regulator Ofgem.
“The chances are that (inflation) will comfortably exceed 5.0 percent when the Ofgem cap on retail energy prices is next adjusted, in April,” Broadbent said in a speech in Leeds, northern England.
Ofgem had in October already raised the energy cap, which limits electricity and gas providers’ standard variable tariffs.
As a result, the UK inflation rate spiked close to a 10-year peak in October, buoyed also by resurgent post-lockdown demand.
The Consumer Prices Index (CPI) rate soared to 4.2 percent, the highest level since November 2011.
That followed 3.1 percent in September and was more than double the BoE’s 2.0-percent target.
The energy cap is widely expected to surge even higher in April, because it does not yet reflect rocketing wholesale gas prices from during the summer months.
Inflation has soared around the world due to high energy prices and resurgent post-lockdown demand, raising the prospect that central banks will hike interest rates sooner than expected.