post-title Inflation ‘set to soar to 4% by late 2017’

Inflation ‘set to soar to 4% by late 2017’

Inflation ‘set to soar to 4% by late 2017’

Inflation ‘set to soar to 4% by late 2017’

UK inflation will quadruple to about 4% in the second half of next year and cut disposable income, a leading think tank has forecast.

The rise in prices will “accelerate rapidly” during 2017 as the fall in sterling is passed on to consumers, according to the National Institute for Economic and Social Research (NIESR).

The revised figure is sharply higher than the 3% it forecast in August.

The economy also faces “significant risks” that could restrict growth.

Consumer Price Index (CPI) inflation rose to 1% in September, up from 0.6% in August, the Office for National Statistics (ONS) said last month.

That was the highest rate for nearly two years as the cost of clothes, petrol and hotel rooms increased.

The Bank of England is expected to raise its forecasts for inflation in its quarterly Inflation Report on Thursday.

The pound has fallen sharply against the dollar and euro since the Brexit vote and NIESR expected sterling to remain at about $1.22 and €1.11 both this year and next.

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