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BoE economist warns UK inflation likely to hit 5% in 2022: report

UK inflation is likely to rise to by around 5% early next year, with a decision on raising interest rates imminent, according to an interview with the Bank of England (BoE) in the Financial Times.

The central bank’s new chief economist Huw Pill told the newspaper that the monetary policy committee would vote on raising interest rates on 4 November, adding that the poll would be “finely balanced”.

Pill said inflation was likely to begin falling again by the second half of 2022.

Rising inflation is starting to materialise more frequently in central organisations’ warnings for growth projections, across multiple countries and markets.

Pill’s comments come after the International Monetary Fund cut its US 2021 growth forecast to 5% from an earlier estimate of 6%, as well as slashing forecasts for the UK, Germany, China and Japan, on the basis of inflation and supply chain issues.

Reinsurers have cited inflation as a major driver of rate increases at this year’s 1 January treaty renewals, as well as recent loss activity in Europe and the US.

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