Arab Press

بالشعب و للشعب
Wednesday, Feb 18, 2026

Inflation likely to hit 5%, warns Bank of England chief economist

Inflation likely to hit 5%, warns Bank of England chief economist

The Bank of England's new chief economist has warned that UK inflation is likely to hit or surpass 5% by early next year.

Huw Pill told the Financial Times that the Bank would have a "live" decision to make at its next interest rate-setting meeting on 4 November.

It follows recent comments from Bank of England governor Andrew Bailey who said it "will have to act" on inflation.

The UK interest rate has been at a historic low of 0.1% since March 2020.

Recent data showed that inflation growth slowed to 3.1% in the year to September. However, it is expected to increase because of rising energy costs, higher wages to fill record vacancy numbers and supply chain disruption.

Mr Pill, who succeeded the Bank of England's former chief economist Andy Haldane last month, said he would "not be shocked" to see inflation reach 5% or above in the coming months.

He told the Financial Times: "That's a very uncomfortable place for a central bank with an inflation target of 2% to be."

Huw Pill became the Bank of England's chief economist in early September

While Mr Pill declined to say how he would vote when the Bank's interest rate-setting Monetary Policy Committee meets early next month - stating "it is finely balanced" - he said: "I think November is live."

Separately, a survey of consumers found that a high proportion of them expect inflation to rise over the next 12 months.

GfK, the market research group, said that 48% of people it surveyed in October think inflation will accelerate, compared with 34% in September.

Joe Staton, client strategy director at GfK, said: "More and more shoppers expect that costs for goods and services will jump dramatically in the next 12 months.

"This rapid increase will impact our ability to shop and save, and our willingness to spend, at a time when our incomes are outpaced by inflation."

'Tough time'


Tony Brown, chief executive of New Start 2020, which owns Beales department stores, told the BBC's Today programme that retailers were facing higher costs, some of which were being passed on to shoppers.

He said that the cost of a container to ship goods into the UK had risen from about $2,000 (£1,450) a year ago to $18,000.

"The wholesalers are passing those costs onto us," said Mr Brown.

He said that, for example, the cost price of a vacuum cleaner had risen from £49 last year to £79.

"So that cost price has to be passed on, we can't absorb it," Mr Brown said. "We are passing on a proportion of that and having to take a hit on the rest, so it does dilute margins.

"It is a tough time for retail out there and I think what we need more than anything is some sort of calmness in the supply chain."

Some of the world's biggest food producers have also said they have been increasing prices of their products to cope with rising raw material costs, as well as higher energy price and supply chain difficulties.

Unilever, which makes PG Tips, Cornetto, Marmite and Dove skin care, said it had lifted prices and expects that to continue into next year.

The Times reported that Unilever said the cost of palm oil, which the company uses in soap and moisturisers, had risen by 82% over two years because of labour shortages in Indonesia.

 Palm oil prices have increased because of a labour shortage in Indonesia

Poor crop production of soya bean oil in Brazil, which is used in food, has also led to higher prices.

Kraft Heinz, which makes tomato ketchup and baked beans, recently warned that people will have to get used to higher food prices.

And Nestle revealed this week that it too had increased prices, which rose by 2.1% in the third quarter.

The maker of Kit-Kats, Nescafé and Purina pet products said prices had risen on the back of higher energy and raw materials costs, as well as transport.

Newsletter

Related Articles

Arab Press
0:00
0:00
Close
Kazakhstan and Saudi Arabia Deepen Strategic Partnership with New Investment and Energy Agreements
Saudi Crown Prince Receives Written Message from Kazakhstan’s President Amid Expanding Strategic Ties
ImmunityBio Shares Rise After Saudi Arabia BCG Manufacturing Update Spurs Investor Optimism
Global Music Star Tyla Confirmed as Headliner at 2026 Saudi Arabian Grand Prix Entertainment Lineup
Somalia and Saudi Arabia Forge New Military Partnership Amid Regional Power Shifts
Saudi Arabia and Several Nations Criticize Israeli West Bank Land Measures as Diplomatic Tensions Rise
Saudi Public Investment Fund Transfers Stake in Take-Two Interactive as Portfolio Strategy Evolves
Saudi Arabia’s Flagship Defense Expo Highlights Industrial Ambitions and Expanding Arms Portfolio
Strategic Divergence Deepens as Saudi Arabia and UAE Recalibrate Gulf Partnership
Saudi Arabia Confirms Start of Ramadan as Crescent Moon Sighted, While Other Nations Begin a Day Later
Rubio Calls for Sweeping U.N. Reform, Saying It Has Failed to End Wars in Gaza and Ukraine
10,000 Condoms Distributed at Winter Olympics 2026 Athlete Village Depleted Within 72 Hours
Prince William Meets Saudi Crown Prince as Epstein-Andrew Fallout Casts Shadow
Goldman Sachs and DP World Executive Resignations: Elite-Reputation Risk and Corporate Governance Fallout From the Epstein Disclosures
OpenAI and DeepCent Superintelligence Race: Artificial General Intelligence and AI Agents as a National Security Arms Race
Prince William in Saudi Arabia on Official Three-Day Visit to Strengthen UK-Saudi Relations
Prince William Highlights Women’s Sport During High-Profile Visit to Saudi Arabia
Prince William Begins High-Profile Diplomatic Mission to Saudi Arabia
Syria and Saudi Arabia Seal Multibillion-Dollar Investment Agreements to Drive Post-War Economic Reconstruction
Apple iPhone Lockdown Mode blocks FBI data access in journalist device seizure
Foreign Governments and Corporations Spend Millions with Trump-Linked Lobbying Firm in Washington
KPMG Urges Auditor to Relay AI Cost Savings
Saudi Arabia Quietly Allows Wealthy Foreign Residents to Buy Alcohol, Signalling Policy Shift
US and Iran to Begin Nuclear Talks in Oman
China unveils plans for a 'Death Star' capable of launching missile strikes from space
Investigation Launched at Winter Olympics Over Ski Jumpers Injecting Hyaluronic Acid
U.S. State Department Issues Urgent Travel Warning for Citizens to Leave Iran Immediately
Wall Street Erases All Gains of 2026; Bitcoin Plummets 14% to $63,000
Eighty-one-year-old man in the United States fatally shoots Uber driver after scam threat
German Chancellor Friedrich Merz Begins Strategic Gulf Tour with Saudi Arabia Visit
Dubai Awards Tunnel Contract for Dubai Loop as Boring Company Plans Pilot Network
Five Key Takeaways From President Erdoğan’s Strategic Visit to Saudi Arabia
AI Invented “Hot Springs” — Tourists Arrived and Were Shocked
Erdoğan’s Saudi Arabia Visit Focuses on Trade, Investment and Strategic Cooperation
Germany and Saudi Arabia Move to Deepen Energy Cooperation Amid Global Transition
Saudi Aviation Records Historic Passenger Traffic in 2025 and Sets Sights on Further Growth in 2026
Tech Market Shifts and AI Investment Surge Drive Global Innovation and Layoffs
Global Shifts in War, Trade, Energy and Security Mark Major International Developments
Tesla Ends Model S and X Production and Sends $2 Billion to xAI as 2025 Revenue Declines
The AI Hiring Doom Loop — Algorithmic Recruiting Filters Out Top Talent and Rewards Average or Fake Candidates
Federal Reserve Holds Interest Rate at 3.75% as Powell Faces DOJ Criminal Investigation During 2026 Decision
Putin’s Four-Year Ukraine Invasion Cost: Russia’s Mass Casualty Attrition and the Donbas Security-Guarantee Tradeoff
Saudi Crown Prince Tells Iranian President: Kingdom Will Not Host Attacks Against Iran
U.S. Central Command Announces Regional Air Exercise as Iran Unveils Drone Carrier Footage
Trump Defends Saudi Crown Prince in Heated Exchange After Reporter Questions Khashoggi Murder and 9/11 Links
Saudi Stocks Rally as Kingdom Prepares to Fully Open Capital Market to Global Investors
Air France and KLM Suspend Multiple Middle East Routes as Regional Tensions Disrupt Aviation
Saudi Arabia scales back Neom as The Line is redesigned and Trojena downsized
Saudi Industrial Group Completes One Point Three Billion Dollar Acquisition of South Africa’s Barloworld
Saudi-Backed LIV Golf Confirms Return to Trump National Bedminster for 2026 Season
×