By Tyler Durden

A startling new report forecasts the inflation rate in the UK could spike to 18% for the first time in nearly half a century due to surging energy costs in the upcoming winter season.

Benjamin Nabarro, the chief UK economist at Citi, told clients Monday that it expects CPI inflation to hit a mindboggling 18.6% in January due to soaring natural gas and power costs.

Nabarro predicted the retail energy price cap would be increased to £4,567 in January and then £5,816 in April, compared with £1,971 in August. Here’s what he told clients:

Our latest estimate, updated for the further 25% and 7% rally in UK gas and electricity prices last week, points to a further upside shift in UK inflation.

Accounting for these developments, as well as updating our own weights for CPI/ RPI and honing our own accounting for curve backwardation, we now expect CPI inflation to peak at over 18% in January. RPI inflation, we think, will peak at over 20%.

The last time CPI printed above 18% was during the stagflationary years of the mid-1970s (more precisely 1976) after an oil supply shock led to soaring energy prices worldwide.

Currently, the CPI stands at 10.1% in July for the first time in four decades, primarily driven by skyrocketing food and fuel prices as households crumble under the weight of the cost-of-living crisis.

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Meanwhile, high inflation pushed the UK Misery Index, an economic indicator to gauge how the average person is doing, to three-decade highs, a sign discontent is emerging.

One of those signs is more than 100,000 people signed up to join a movement to skip out on paying their power bills beginning on Oct. 1.