UK inflation could exceed 7 percent this year to reach levels last seen in the 1990s – Times

“Inflation could exceed 7% this year to reach levels last seen in the 1990s,” as per the annual survey of economists by The Times.

“Prices rose by 5.1 percent in the year to the end of November, the highest rate in a decade,” added the Times.

Key findings

More than half of the 32 economists polled, who include former Bank of England policymakers, said they expect consumer prices to rise by at least one percentage point from current levels.

Over a third of the economists expect inflation to peak between 6 and 6.5 percent, while 15 percent predict it will surpass 6.5 percent. Two economists, including a former Bank rate-setter, said inflation would top 7 percent.

FX implications

An annual survey of economists by The Times suggests further upside for the GBP/USD pair as inflation fears were cited by the Bank of England (BOE) policymakers while announcing the latest rate hike. That said, the pair consolidates recent losses around 1.3475 by the press time.

Read: GBP/USD Price Analysis: Grinds higher between 50 and 100 DMAs