Britain is set to see the sharpest rise in inflation for three decades next year, putting pressure on already struggling households as interest rates and bills rise.
Economists at Citigroup warned that the consumer prices index (CPI) could hit 6.8% next year, while the retail prices index (RPI) could rise as high as 8.6%, the Telegraph reported.
CPI surged to 5.1% in November, its highest in more than 10 years, due to higher prices for petrol, food, clothing and footwear. The rise prompted the Bank of England to raise interest rates in December for the first time in three years to 0.25% from 0.1%.
Record-high energy prices and supply chain constraints have led to rising inflation across the world this year.
In Britain, energy industry executives have warned that domestic energy bills could rise by as much as 50% next year.
READ: UK energy industry warns domestic bills may soar 50% next year and urges government action