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Citygroup’s top UK economist red-faced after prediction of 18.6% inflation was clearly wrong
Benjamin Nabarro, British chief economist at US banking giant Citigroup, now predicts inflation to fall to 2.3% in November
Prediction is difficult, especially when it comes to the future. That’s the joke among economists.
Benjamin Nabarro, chief UK economist at US banking giant Citigroup, is learning how hard his forecast last August that UK inflation would reach 18.6 per cent has now fallen far off target.
Yesterday he peered into his crystal ball again and saw a different picture, in which he predicted inflation would fall to 2.3 percent in November, below the Bank of England’s expectation of around 4 percent.
Rising inflation is no joke, eroding the value of household income and cutting away savers’ nest eggs. Inflation was 11.1 percent in October and is still above 10 percent, higher than wage growth.
Yet it now appears that some economists have gone too far in their predictions. Goldman Sachs even suggested inflation could hit 22.4 percent if gas prices remained high. But they’ve since fallen, prompting Nabarro to change.
It means typical annual utility bills will drop to £2,000 by the middle of this year, according to Cornwall Insight – low enough that the government won’t have to spend billions subsidizing them.