Warning of British inflation shock as UK inflation could rise to around 5 percent

If Monday's unusually sharp price increase for oil and natural gas persists, British inflation could rise to more than twice the inflation target of 2 percent in a few months, analysts warn.

James Smith, an economist at ING, believes inflation could rise to 4.7 percent in September if the rise in fossil fuel prices continues. Tom Pugh at accounting firm RSM UK believes it could top 5 percent.

The Bank of England - which has cut its key interest rate to 3.75 percent from its peak of 5.25 percent in 2024 - had forecast British inflation of 2 percent this spring before the US and Israeli attack on Iran.