0811 GMT - Inflation in the U.K. could rise to a peak of about 4.6% in the fourth quarter of 2026, Ruth Gregory at Capital Economics says in a note. The annual rate of inflation remained at 3.0% in February, far higher than the eurozone's rate of 1.9%. Due to the energy shock triggered by conflict in the Middle East, elevated petrol and diesel prices will likely drive inflation higher in the coming months. "And that's before the indirect boost from businesses passing on some of their energy costs in the prices of non-energy items," Gregory says. Still, at this stage an extended interest-rate pause is more likely than rate hikes given the expected hit to growth and the labor market from higher energy prices, she says. (don.forbes@wsj.com)
(END) Dow Jones Newswires
March 25, 2026 04:11 ET (08:11 GMT)
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