Citygroup’s top UK economist left red-faced after 18.6% inflation prediction

Benjamin Nabarro, chief UK economist at US banking giant Citigroup is now predicting inflation would fall to 2.3% by November

Forecasting is hard – especially about the future. So runs the joke among economists.

Benjamin Nabarro, chief UK economist at US banking giant Citigroup, is finding out just how hard after his forecast last August that UK inflation would hit 18.6 per cent by around now proved well wide of the mark.

Yesterday he peered into his crystal ball again and saw a different picture, predicting inflation would fall to 2.3 per cent by November, below the Bank of England’s expectation of around 4 per cent.

Soaring inflation is no joke, eroding the value of household income and whittling away savers’ nest eggs. Inflation hit 11.1 per cent in October and is still above 10 per cent, ahead of pay growth.

Yet it is now apparent some economists went overboard in their predictions. Goldman Sachs even suggested inflation could hit 22.4 per cent if gas prices stayed high. But they have since fallen – prompting Nabarro’s change.

It means typical annual energy bills falling to £2,000 by the middle of this year, according Cornwall Insight – low enough that the Government will not have to spend billions subsidising them.