The US bank Goldman Sachs has warned that the Bank of England will not be able to control inflation until the end of 2025 due to rising food prices and “alarming” wage growth.
The Wall Street giant has predicted that it will take at least two and a half years for politicians to return the key rate to the target level of 2% from the current level of 8.7%.
Ibrahim Kadri, a British economist at Goldman Sachs, warned that inflation, which has remained above the bank’s target since August 2021, is beginning to affect a range of goods and services. Average degree.
Goldman Sachs analysis showed that there is a delay of approximately six months between any significant increase or decrease in producer prices and its impact on weekly store prices.
While this relationship suggests that supermarket prices “should go down in the future”, the decline is likely to be “gradual”, with food prices continuing to rise at least 2.5% annually until 2026.
The British Retail Consortium (BRC) said store price inflation accelerated to 9% this month from 8.8% in April.