Citigroup blamed soaring energy costs for its prediction today that UK inflation will almost double in early 2023.
The US bank has forecast energy bills with push consumer price rises up to 18.6% early in 2023 from 10.1% currently.
Retail price inflation will climb even higher, peaking at 21.4%, while to counter the surge the Bank of England will be forced to raise interest rates.
Citi’s gloomy forecasts stretch to the energy price cap with the bank forecasting this will hit £3,717 this week before rising to £4,567 in January 2023 and £5,816 in April.
Energy consultant Cornwall Insight is equally pessimistic suggesting the annual cap will rise to £3,554 from October about an 80% rise from the current £1,971 and peak at more than £5,300 in the second quarter of 2023.
Underlining the forecasts, gas and electricity prices hit new highs all over Europe today on fears that Russia would turn off supplies.
German electricity prices are higher than they have ever been while Dutch gas futures jumped 20% due to fears that the Nord Stream pipeline will shut down later this month and not re-open.
US natural gas prices meanwhile also rose to a 14-year high.
Cornwall Insight said that the extreme volatility in the market at present means that there is a chance the numbers and predictions will change, while the UK government might also step in and offer direct help to households struggling to meet energy bills.
The Conservatives though have said no new policies will be announced until the election of a new PM is decided.
Greg Jackson, chief executive of major UK supplier Octopus Energy, said it was not fair that UK consumers have to bear the cost of the Ukraine war.
He called on the government to double the current support package, currently £400 or £650 for vulnerable users, alongside a freezing of current tariffs.
Another CEO, Dale Vince of renewable specialist Ecotricity, said the government should simply step in and pick up the tab.
“We need £40bn to get through this winter. That's 10% of what was spent during the pandemic and that's the only thing that will really sort this problem out."