Britons are preparing for increased inflation as household bills surge next month, primarily driven by a 6.4% rise in energy costs and a significant 26% hike in water bills. Concurrently, prices for telecom services are set to increase by about 6%. The Bank of England expects the annual inflation rate to peak at 3.7% in Q3, up from 3% in January, citing factors such as robust wage growth and global economic uncertainties, including trade tensions and rising defense spending, which complicate future fiscal policies.
Next month, the average annual energy bill is set to rise 6.4 percent as the price cap resets. Water bills, which are also regulated, will climb an average 26 percent.
Britain's annual inflation rate is expected to peak at 3.7 percent in the third quarter of this year, accelerating from 3 percent in January, the Bank of England forecast.
Though there has been evidence that inflation was returning to the bank's 2 percent target, the uncertainty policymakers face has grown substantially in recent weeks.
Policymakers, he added, are watching domestic and global economic changes very closely.
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