INFLATION is on course to top 18 per cent at the start of 2023 due to rocketing energy bills.

New forecasts by economists at Citi prompted Labour to sound the alarm over a “national emergency” as calls resounded for pay rises and price caps to protect ordinary people.

The prediction came as MPs warned Liz Truss to come clean over her emergency budget to address the cost of living crisis: she is reported to have refused to ask the independent Office for Budget Responsibility (OBR) for a forecast on its impact.

Experts at transnational banking giant Citi forecast that consumer prices index (CPI) inflation in January will be at the highest rate for almost half a century — last month, the figure struck a new 40-year-high of 10.1 per cent.

The Bank of England has previously projected that inflation would peak above 13 per cent in October before declining.

But Citi analyst Ben Nabarro has forecast that inflation will jump to 14.8 per cent in October as energy bills spike.

He predicted that inflation will accelerate following last week’s 25 per cent rise in gas prices and a 7 per cent rise in electricity prices.

Citi said it expects the October energy price cap to reach £3,717 — higher than previous estimates — and a further increase in energy bills in January, with projections the cap will hit £4,567, will push inflation towards the new peak.

According to Citi, the price cap is likely to surge even higher to £5,816 in April.

These startling new forecasts predict inflation will stay in double figures for at least the next 12 months.

Today Labour deputy leader Angela Rayner declared it was “a national emergency” and said this “disgraceful Tory government is missing in action and has no plan.”

She called for Parliament to be recalled to “adopt Labour’s plan to freeze energy bills.”

Labour’s Richard Burgon went further, telling the Morning Star: “We need measures that address the true scale of the social emergency.  

“That means inflation-proofing wages and benefits, but it also means capping the prices of essentials including rent, basic foods and energy. 

“One of the biggest lies coming from the Establishment is that wages must fall to deal with soaring inflation. Workers’ wages aren’t driving this inflation crisis. Soaring profits are having a much bigger impact,” he said, echoing research by the Unite union on profit inflation among the FTSE 350.

He added: “The corporations that are raking in record profits certainly can afford to lower prices and increase wages instead.”

Sir Keir Starmer hit out at Ms Truss, the favourite to succeed Boris Johnson as Tory leader and prime minister, for not asking the OBR for a view on the measures she is planning in an emergency budget next month.

He said: “We need an emergency budget. We should have had that months ago.”

But he said a review of such a budget by the fiscal watchdog established by the David Cameron government to rein in spending would ensure the money was spent “wisely.”

Tory leadership rival Rishi Sunak’s campaign urged Ms Truss to come clean and labelled her plans to borrow to fund tax cuts dangerous.

Commons Treasury select committee chairman Mel Stride, a Sunak supporter, told LBC that not getting an OBR forecast is “kind of like flying blind.

“It means that you do all these dramatic things on tax etc but you don’t actually know what the independent forecaster believes the impact will be on the public finances,” he said.