Inflation also raises the cost of borrowing for the government, with spending on debt interest set to rise.

Such repayments are also predicted to increase the overall amount the government borrows, which is set to increase every year by more than had been previously forecast by the OBR.

Higher spending on welfare and pensions due to inflation is also expected to increase borrowing, though it is forecast to fall as a share of the economy over the next five years.

However, forecasts are only a best guess at what might happen in the future. Given the way the conflict in the Middle East has upended previous predictions, the future of the war could alter inflation expectations.

US President Donald Trump has suggested the war will end after the mid-term elections next month.

The OBR admitted there remained “significant uncertainty” around its predictions due to the changing situation in the Middle East.