Inflation set to rise

NIESR: Inflation to hit 3.9% in early 2022The National Institute of Economic and Social Research (NIESR) says consumer price inflation will reach 3.9% early in 2022 but should fall back to 2% in 2023 if the Bank of England lifts interest rates. The think-tank also revised its growth forecast for the UK for 2021, increasing it from 5.7% to 6.8%. NIESR also warns that unemployment is likely to rise by 150,000 once the Government’s furlough scheme is wound down at the end of September, taking the jobless rate from the current 4.8% of the workforce to 5.4%. NIESR deputy director Hande Küçük said: “Supply-side factors and effects of reopening amid the recovery in consumption are likely to keep inflation well above the Bank of England’s 2% target for the most part of next year.”