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UK inflation could hit 18% next year on rising energy bills, experts warn

Rising energy prices could push UK inflation as high as 18% next year, the highest rate in nearly 50 years, economic analysts have predicted. Inflation - the rate at which prices rise - hit 10.1% in July, five times the Bank of England's (BoE) target. Investment bank Citi said inflation was "entering the stratosphere" and could rise to 18%, while the Resolution Foundation said it could reach 18.3%. The BoE predicted inflation will rise to more than 13% in the coming months. Citi's forecast - which would be the UK's highest rate of inflation since 1976 - comes ahead of Friday's energy price cap announcement on the maximum amount suppliers can charge households for gas and electricity from October. The investment bank's forecast is at the higher end of the scale compared to those made by other economists, such as EY-Parthenon which has forecast inflation to be at 15.4%. However, economists at the Resolution Foundation think tank told the BBC that based on the current price cap predictions and the latest data on the rate prices are rising at, inflation could go as high as 18.3%. Citi's chief UK economist, Benjamin Nabarro, said affordability concerns were "growing more deafening by the day". "The question now is what policy may do to offset the impact on both inflation and the real economy," he said.