UK Inflation Could Hit Three-Year High of 4.4% in Early 2027, Economists Warn

Rising energy prices could push inflation in the United Kingdom to its highest level in three years in early 2027, according to economists surveyed by the Financial Times (FT).

The economists expect the country's average inflation rate to reach 4.4 per cent in the first quarter of next year (January-March). The projected increase could also put mounting pressure on the Bank of England (BoE) to raise interest rates to bring inflation under control.

The FT conducted the survey this week among 12 economists. All but one of them predicted that inflation would exceed 4.1 per cent next year.

Five respondents forecast that the inflation rate could rise to between 4.5 and 5 per cent.

Most of the economists believe inflation will peak during the first three months of 2027.

The latest projections are significantly higher than estimates published last week by the UK's Office for Budget Responsibility (OBR).

The OBR had forecast that inflation could peak at 3.8 per cent in the first quarter of next year.

The widening gap between the forecasts highlights growing concerns over the impact of rising energy costs on the UK's economy and the challenges facing policymakers in controlling inflation.