The spectre of a widening conflict in the Middle East is a key risk factor in the outlook, with the recent jump in oil and natural gas prices suggesting inflation could be slower to subside. The conflict could “restrain how far inflation falls next year”, Paul Dales, an economist at Capital Economics, said. “Together with a more gradual easing in core inflation and wage growth, this adds support to our view that the bank won’t cut interest rates until late next year.”