LONDON/HONG KONG, Aug 30 (Reuters) – Inflation in Britain could exceed 20% early next year if spiralling gas prices fail to come down, economists from U.S. investment bank Goldman Sachs warned, adding that a recession was on the way.
Last week Britain’s energy regulator said power bills will jump 80% to an average of 3,549 pounds ($4,188) a year from October, plunging millions of households into fuel poverty and leaving businesses at risk unless the government steps in. [nL8N3020Z2]
“In a scenario where gas prices remain elevated at current levels, we would expect the price cap to increase by over 80% in January (vs 19% assumed in our baseline),” Goldman economists said in a research note.
“(This) would imply headline inflation peaking at 22.4%, well above our baseline forecast of 14.8%.”
Last week economists from Citi said consumer price inflation was set to peak at 18.6% in January, more than nine times the Bank of England’s target. read more
Goldman said it expected a recession to begin in the fourth quarter,with the economy set to contract by 0.6% in 2023 as a whole – gloomier than the Reuters poll consensus for growth of 0.2% but less severe than the 1.5% drop predicted earlier this month by the Bank of England.
The BoE looks set to raise interest rates by 50 basis points to 2.25% next month, Goldman said, adding that it saw upside risks to its forecasts for additional 25 basis-point hikes in following policy meetings.
ah 20%.
Wasn’t it only meant to be 13.5%?
They’ve consistently underestimated the severity of the crisis month by month.
​
Most predictions rely on previous modelling and past experience to try and predict future performance with varying degrees of accuracy. Such modelling seems to be inadequate in forecasting this unusual perfect storm of variables of recession coupled with inflation along with other global factors such as brexit and market instability.
​
Most of what little I have read and understood about stagflation is that the only effective course to mitigate the problems is immediate and dramatic intervention by the state – but here we are with a zombie government that is ideologically incapable of thinking of actionable solutions.
​
Policy should have been implemented to lessen these shocks several months ago. But again like the Covid response – its going to be too little too late.
Yes, best in the world!.
Highest is bestest right?, RIGHT?
Remember when it was going to peak at 6% 😀
Don’t worry, our imminent Dear Leader will ensure pork market and British cheese access is maximised during these trying times.
And no one will do a thing about it
Time to eat the rich
Supporting lockdown,
Supporting Ukraine war defence effort
If you do indeed support the above. Which I would say 99% of usual posters in here do. Then you don’t have much to criticise the government for. Suck it up. These are the consequences.
What fucking recession we are still up to our necks from 2008 Goldman my arse .
Strong and stable
Serious question, if inflation does hit 20% is it likely our service providers like sky, virgin, EE and the likes who increase their in contract prices in April at RPI plus a bit going to be legally able to whack nearly 25% on our already expensive bills?
Maybe they should hike the interest rate up to 20% to 30% and sink inflation down to kingdom come?
The recession is inevitable, now we just have to see how bad it will be. The current government inaction would suggest we are pretty damn screwed.
Wel 6pints of milk went up from 1.10 to 1.80 for me so I think we’re past the 20% stage
That’s optimistic. Company I work for have already put their prices up by 17% this year and that’s not going to cover the energy bill.
[They’ve made out like bandits during every recession in recent times. They have actively pushed junk products onto unsuspecting customers and walked away from the carnage with full pockets](https://en.m.wikipedia.org/wiki/Goldman_Sachs_controversies)
If Goldman Sachs are warning us that inflation could reach 20%, just remember that behind closed doors their eyes are rolling back in their heads as they tremble in anticipation of that delicious disastergasm, _it’s in their interest_. Conditions are ripe for plundering and mopping up assets
We’re going to smash through 20% don’t you worry.
Can we have a bailout for the general public rather than banks this time please?
19 comments
LONDON/HONG KONG, Aug 30 (Reuters) – Inflation in Britain could exceed 20% early next year if spiralling gas prices fail to come down, economists from U.S. investment bank Goldman Sachs warned, adding that a recession was on the way.
Last week Britain’s energy regulator said power bills will jump 80% to an average of 3,549 pounds ($4,188) a year from October, plunging millions of households into fuel poverty and leaving businesses at risk unless the government steps in. [nL8N3020Z2]
“In a scenario where gas prices remain elevated at current levels, we would expect the price cap to increase by over 80% in January (vs 19% assumed in our baseline),” Goldman economists said in a research note.
“(This) would imply headline inflation peaking at 22.4%, well above our baseline forecast of 14.8%.”
Last week economists from Citi said consumer price inflation was set to peak at 18.6% in January, more than nine times the Bank of England’s target. read more
Goldman said it expected a recession to begin in the fourth quarter,with the economy set to contract by 0.6% in 2023 as a whole – gloomier than the Reuters poll consensus for growth of 0.2% but less severe than the 1.5% drop predicted earlier this month by the Bank of England.
The BoE looks set to raise interest rates by 50 basis points to 2.25% next month, Goldman said, adding that it saw upside risks to its forecasts for additional 25 basis-point hikes in following policy meetings.
ah 20%.
Wasn’t it only meant to be 13.5%?
They’ve consistently underestimated the severity of the crisis month by month.
​
Most predictions rely on previous modelling and past experience to try and predict future performance with varying degrees of accuracy. Such modelling seems to be inadequate in forecasting this unusual perfect storm of variables of recession coupled with inflation along with other global factors such as brexit and market instability.
​
Most of what little I have read and understood about stagflation is that the only effective course to mitigate the problems is immediate and dramatic intervention by the state – but here we are with a zombie government that is ideologically incapable of thinking of actionable solutions.
​
Policy should have been implemented to lessen these shocks several months ago. But again like the Covid response – its going to be too little too late.
Yes, best in the world!.
Highest is bestest right?, RIGHT?
Remember when it was going to peak at 6% 😀
Don’t worry, our imminent Dear Leader will ensure pork market and British cheese access is maximised during these trying times.
And no one will do a thing about it
Time to eat the rich
Supporting lockdown,
Supporting Ukraine war defence effort
If you do indeed support the above. Which I would say 99% of usual posters in here do. Then you don’t have much to criticise the government for. Suck it up. These are the consequences.
What fucking recession we are still up to our necks from 2008 Goldman my arse .
Strong and stable
Serious question, if inflation does hit 20% is it likely our service providers like sky, virgin, EE and the likes who increase their in contract prices in April at RPI plus a bit going to be legally able to whack nearly 25% on our already expensive bills?
Maybe they should hike the interest rate up to 20% to 30% and sink inflation down to kingdom come?
The recession is inevitable, now we just have to see how bad it will be. The current government inaction would suggest we are pretty damn screwed.
Wel 6pints of milk went up from 1.10 to 1.80 for me so I think we’re past the 20% stage
That’s optimistic. Company I work for have already put their prices up by 17% this year and that’s not going to cover the energy bill.
[Just remember that Goldman Sachs are doing Gods work](https://www.reuters.com/article/us-goldmansachs-blankfein-idUSTRE5A719520091108)
[They’ve made out like bandits during every recession in recent times. They have actively pushed junk products onto unsuspecting customers and walked away from the carnage with full pockets](https://en.m.wikipedia.org/wiki/Goldman_Sachs_controversies)
[They’ve been accused of rigging markets](https://news.bloomberglaw.com/antitrust/citi-bofa-goldman-other-banks-accused-of-cds-antitrust-scheme)
If Goldman Sachs are warning us that inflation could reach 20%, just remember that behind closed doors their eyes are rolling back in their heads as they tremble in anticipation of that delicious disastergasm, _it’s in their interest_. Conditions are ripe for plundering and mopping up assets
We’re going to smash through 20% don’t you worry.
Can we have a bailout for the general public rather than banks this time please?