![](\"https:\/\/cdn.images.express.co.uk\/img\/dynamic\/22\/590x\/1581365_1.jpg?r=1647422365533\")
<\/p>\nWe use your sign-up to provide content in ways you’ve consented to and to improve our understanding of you. This may include adverts from us and 3rd parties based on our understanding. You can unsubscribe at any time. More info<\/p>\n
Inflation is already nearly three times higher than the Bank of England’s target and is expected to climb further. While already a problem before the Ukraine conflict, inflation is now expected to go much higher and last longer as prices on commodities such as oil, gas, wheat and metals are all pushed up. Patrick Reid, an economist and lecturer at Cambridge University, said he was “very concerned about the coming difficult days ahead for the UK economy”. While inflation had previously been predicted to peak at just over seven percent in spring, many predictions now put it as high as eight percent or beyond with the potential for a second peak in October when Ofgem’s energy price cap will rise again.<\/p>\n
Mr Reid however suggested even these predictions fell short. He said: “Forget 7 percent inflation projections.<\/p>\n
Inflation is heading to 10 percent in the next three months, and could go well beyond this – potentially reaching as high as 15 percent in the next 12-18 months.<\/p>\n
The impact could take years to overcome.”<\/p>\n
Currently energy prices have proved one of the biggest drivers of inflation making tensions with Russia, one of the world’s largest gas and oil exporters, a key part of the problem.<\/p>\n
Mr Reid predicted that unless the situation was de-escalated oil could reach as high as $260 (£199.17) a barrel in the next six months.<\/p>\n
<\/p>\n
![](\"https:\/\/cdn.images.express.co.uk\/img\/dynamic\/22\/590x\/secondary\/3970198.jpg?r=1647422365575\")
<\/p>\n
Surging oil prices have already pushed petrol prices to record levels.<\/p>\n
Although oil has recently dipped back below $100 a barrel it is still proving highly volatile, with key questions to answer on how supplies will be maintained as exports from Russia are phased out.<\/p>\n
The high levels of inflation facing the UK have raised the risks of stalling growth as businesses struggle to absorb the higher operating costs and consumers cut back on spending.<\/p>\n
The British Chambers of Commerce has warned of a “cost of doing business crisis”, alongside the cost of living crisis, and have urged the Chancellor Rishi Sunak to act to avoid economic crisis.<\/p>\n
![](\"https:\/\/cdn.images.express.co.uk\/img\/dynamic\/22\/590x\/secondary\/3970200.jpg?r=1647422365667\")
<\/p>\n
The group has warned inflation, combined with supply shortages of key materials, could end up leading to a recession as growth stalls and the economy shrinks.<\/p>\n
Mr Reid added: “All markers indicate the UK will go into recession – most likely Q1 or Q2 next year.<\/p>\n
“Without a significant deviation from the current trajectory, the 2023 recession will be the worst the UK has faced since the 1970s.”<\/p>\n
An example of these markers was seen this week when ONS figures revealed real wages had fallen one percent as salaries failed to keep pace with inflation.<\/p>\n
Mr Reid however believes the Government’s response to the figures indicates an underplaying of the current financial situation.<\/p>\n
He said: “The Chancellor’s response was far more positive in its analysis, highlighting a year of falling unemployment and a stronger jobs market bounce back than so many predicted.<\/p>\n
DON’T MISS:<\/strong> “This is disingenuous, and another example of the Government not being clear enough with the public about how difficult the next two years will be economically.<\/p>\n “Better financial education leads to better outcomes for individuals and society, and Rishi must now be completely honest and clear about the real state of our economy, and what it means for both business and families.”<\/p>\n All eyes will be on the Chancellor next week when Mr Sunak delivers his Spring Statement with close attention to any new measures to alleviate current cost pressures.<\/p>\n A top concern for many is the planned rise in National Insurance which it has been argued will add further pressure to household pay and deter businesses from expanding and hiring new staff.<\/p>\n Shevaun Haviland, Director General of the British Chambers of Commerce warned the rise would “be a drag anchor on the economy”, calling for it to be delayed at least a year.<\/p>\n
Russian central bank scrambles further to defend ruble [ANALYSIS] <\/strong>
Boost to energy security as UK receives first new North Sea gas [INSIGHT]<\/strong>
Camelot to lose National Lottery licence after 28 years [SPOTLIGHT]<\/strong><\/p>\n![](\"https:\/\/cdn.images.express.co.uk\/img\/dynamic\/22\/590x\/secondary\/3970203.jpg?r=1647422365786\")
<\/p>\n