The British public are in for a nasty surprise.
Inflation is expected to quadruple to nearly 4% in less than a year, making everyday items much more expensive, according to a report by the National Institute of Economic and Social Research.
The independent British think tank forecasts that inflation will rise sharply and peak at 3.9% in the third quarter of 2017 as a result of a crash in the value of the pound triggered by the U.K.’s decision to leave the European Union.
The currency fell as much as 20% versus the U.S. dollar, and 17% versus the euro, in the months after the Brexit vote in June, although it has steadied a bit in recent days.
When the pound goes down, the cost of imports rises. That pushes up inflation.