Goldman Sachs Warns UK Inflation Could Top 22% as Energy Prices Soar

LONDON — U.K. inflation could soar above 22% next year if energy prices continue their upward spiral, U.S. investment bank warned.

In a research note dated Monday, Goldman said headline inflation could peak at 22.4% and gross domestic product could drop by 3.4% if energy costs keep rising at their current pace.

It comes after British households were hit with a projected 80% increase in their energy bills in the coming months, taking the average annual household bill to £3,549 ($4,197) from £1,971 and exacerbating the country’s existing cost-of-living crisis.

Britain’s energy regulator announced Friday that it would raise its main cap on consumer energy bills from Oct. 1 to keep pace with rising wholesale gas prices, which have surged 145% in the U.K. since early July.