Inflation in the United Kingdom could soar to as high as 19% by next year because of high winter fuel prices, according to a new estimate. Could that happen in the U.S.? It already has, once. The rate of U.S. inflation skyrocketed to 18% in 1946 after the government ended price controls and rationing put in place during World War II. Inflation also topped 13% in 1981 during the most recent previous bout of high U.S. inflation.
But there’s virtually no economist who thinks U.S. inflation is poised to explode past 10% and reach those early 1980s or post–World War II levels. “Can it happen here? Anything can happen,” said Steve Blitz, a U.S. economist at London-based TS Lombard. “But will inflation go back to double digits? I doubt it.” The situations in the U.S. and U.K. are very different, economists say. For one thing, the U.K. is facing perhaps its worst energy shortage in history. The nation is already paying sky-high prices for natural gas, and prices could keep going up if Russia further limits fuel exports to the U.K. and Europe over the winter. See: Pain in Europe worsens with natural-gas prices up nearly 20% as Russia readies to shut down vital pipeline again Russia, the world’s second largest producer of natural gas, has cut supplies to Europe after sanctions were imposed on Russia following its invasion of Ukraine. A Citibank economist in London predicted in a …