The US bank “Goldman Sachs” warned that the Bank of England will not be able to control inflation before the end of 2025 due to the rise in food prices and the “alarming” rise in wages.
The Wall Street giant predicted that it would take at least two and a half years for policymakers to return the key rate to the 2% target from the current level of 8.7%.
Ibrahim Qadri, a British economist at Goldman Sachs, warned that inflation, which has remained above the bank’s target since August 2021, is beginning to affect a number of goods and services. The risks of wage growth that do not subside adequately and sustainably over the medium term.
The Goldman Sachs analysis showed that there was a delay of about six months between any significant increase or decrease in producer prices and its impact on the weekly cost in stores.
While this relationship suggests that supermarket prices “should moderate going forward,” the decline is likely to be “gradual,” with food prices continuing to rise at an annual pace of at least 2.5% until 2026.
The British Retail Consortium (BRC) said store price inflation accelerated to 9% this month, up from 8.8% in April.
This article was originally published by RT.