Will UK inflation hit the highest level in a decade?

UK inflation is forecast to hit its highest rate in a decade in October as supply chain disruptions, rising energy prices and a tight labour market push the cost of consumer goods sharply higher.

Consumer price growth will reach an annual pace of 3.9 per cent in October, a pick-up from the 3.1 per cent registered in September, according to a Refinitiv survey of economists. George Buckley, economist at Nomura, said ahead of a report from the Office for National Statistics on Wednesday that he expects inflation will climb further to 4.5 per cent in November and to reach a peak of 5 per cent in the spring of next year, in line with Bank of England expectations.

After the spring, the BoE expects inflation to fall as the impact of higher oil and gas prices fades, the demand for goods cools and some of the raw material shortages ease.