1041 GMT - Surging gas prices could see U.K. inflation hit 4.0% this year, Rob Wood at Pantheon Macroeconomics says in a note. U.K. natural gas spot prices rose roughly 30% from Wednesday's close. "We estimate that energy prices this morning would mean that inflation falls only a little further, to 2.8% in April, before rising back above 3% in May, to 3.9% in August and to 4.0% in November," Wood says. Pantheon is starting to include second-round effects in its inflation outlook because inflation above the psychologically-significant 4.0% level tends to drive up household inflation expectations. "The [Bank of England] will have to be careful if there is a real risk that headline inflation rises back above 4% and maybe towards 5%," Wood says. (don.forbes@wsj.com)
(END) Dow Jones Newswires
March 19, 2026 06:41 ET (10:41 GMT)
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