Fears for inflation as oil price jumps 30pc in four months Victoria Clarke, economist at Investec who predicts a fall in consumer prices inflation (CPI) of 2.3pc for August when the Office for National Statistics reports the data on Tuesday, expects inflation to increase early next year. Beyond August, we do expect CPI to continue to moderate, but that trend may not last too long. Droughts in the US are likely to mean higher food prices emerge early next year," she said. Coupled with the upward creep in petrol pump prices, and with gas and electricity price hikes expected this autumn, we are likely to see CPI inflation rising early next year. On average, economists predict CPI, which hit a 31-month low in June before a surprise rise to 2.6pc in July, will ease back to 2.5pc or less in August. The Bank of England, which has been troubled by inflation staying subbornly above target, has said the rate will fall back to 2pc throughout 2012 and into 2013. Some economists believe the rise in the oil price is out of kilter with fundamentals and that the current rally cannot be sustained in the face of an increasingly fragile global economy. Julian Jessop, chief global economist at Capital Economics, said: "I think it's a spike. The latest economic data are still weak. Optimism about a further loosening in policy from already very supportive settings seems unlikely to deliver a rapid turnaround. He said this optimism, reflected in rising equity markets and higher commodity prices, had been driven by hopes of additional policy stimulus - in China as well as the US - and fading concerns over the euro-zone. "Oil prices should drop back of their own accord as the focus returns to the continued deterioration in economic conditions which makes additional stimulus necessary," Mr Jessop said. Even if they don't, higher oil prices will further undermine growth, increasing the chances of a harder landing both for the economy and ultimately oil prices themselves. Middle East concerns have played some part but only a small one as the "the oil market is still well supplied for now," he said. Howard Archer, chief UK and European economist at IHS Global Insight, does not expect CPI to dip below 2pc until well into 2013. "Future oil and food price developments will have a key role to play in just how far and how quickly consumer price inflation comes down over the coming months," he said. Capital Economics is forecasting Brent to average $85 a barrel next year.