london uk inflation could soar above 22 next year if energy prices continue their upward spiral us investment bank goldman sachs warned in a research note dated monday goldman said headline inflation could peak at 224 and gross domestic product could drop by 34 if energy costs keep rising at their current pace it comes after british households were hit with a projected 80 increase in their energy bills in the coming months taking the average annual household bill to £3549 4197 from £1971 and exacerbating the countrys existing costofliving crisis britains energy regulator announced friday that it would raise its main cap on consumer energy bills from oct 1 to keep pace with rising wholesale gas prices which have surged 145 in the uk since early july ofgem is due to recalculate its price cap again in three months however goldman said that if prices remain persistently higher another 80 hike could be possible in a scenario where gas prices remain elevated at current levels we would expect the price cap to increase by over 80 in january  which would imply headline inflation peaking at 224 goldman economists led by sven jari stehn said in the note if however energy prices moderate uk peak inflation is likely to hit 148 in january goldmans commodity strategists predicted well above the 133 forecast by the bank of england earlier this month the bank also said that the uk was likely to fall into a recession in the fourth quarter it forecast that the uk economy would contract by 03 on a nonannualized basis in the fourth quarter of this year followed by 04 and 03 in the first and second quarters of 2023 respectively we now expect the deepened costofliving crisis to push the uk economy into recession later this year the note said goldmans outlook is the latest gloomy forecast for the british economy with citi predicting last week that uk inflation would breach 18 in january 2023