LONDON: British consumer price inflation is likely to peak at an annual rate above 15% in the first three months of next year unless there are government measures to lower prices, economists at U.S. bank Citi forecast on Wednesday.

Earlier on Wednesday, official figures showed CPI hit 10.1% in July, above all economists’ predictions in a Reuters poll.

“In our view, the composition re-affirms the risk of more sustained domestic inflation. In the absence of offsetting support, we expect CPI inflation to accelerate to over 15% in Q1-23,” Citi economist Benjamin Nabarro wrote in a note to clients.

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Citi had previously forecast CPI inflation would peak at just below 12%.

Citi also revised up its expectations for BoE interest rates, predicting they would rise by 1.25 percentage points to 3% by the end of this year, up from a previous forecast for a half percentage point rise in the remainder of 2022.