Inflation ‘will last until next year’

THE Bank of England’s chief economist has warned high inflation could last well into next year as disruption to energy and food inflation continue to push up prices.

Huw Pill, a member of the Monetary Policy Committee, which sets interest rates, said the predicted increase in inflation to double digits was ‘the biggest challenge’ the Bank had faced since it was granted independence 25 years ago. He hinted rates could rise further than their current 1pc.

The UK imports large amounts of food and energy, and has been hit by price spikes from supply chain disruptions caused by war in Ukraine.

UK inflation hit 9pc in April, its highest in 40 years. Pill said: ‘Headline inflation is set to be high well into 2023, adding that the ‘tight’ labour market, with unemployment at a 50-year low of 3.7pc, could also exacerbate inflation as wages were ‘growing at stronger rates’ than normal.

‘In short, inflationary momentum in the UK is currently strong,’ Pill said.