A leading economy forecaster has warned today that Britons should be prepared to cope with years of high inflation as the cost of living soars stubbornly ahead of wages. The Ernst & Young Item Club said that high inflation is persistent and had knocked almost 3% points off the economy over the past three years.

It was set to cross the Bank of England's 2 percent target for the foreseeable future. The latest predictions have debunked the optimism over an easing inflation outlook. It sees the consumer price index to return to two percent by mid-2015. Figures from the Office for National Statistics will tomorrow show that first fall in the CPI since September last year as petrol prices bring down the annual rate of inflation from 2.8% to 2.6% in April.

This is still three times higher than average annual wage growth. The forecaster warned that the price of imported goods from emerging markets continue to rise, which means that the outgoing Governor Sir Mervyn King's "Nice" decade of non-inflationary consistent expansion are gone for good.

It added that government policy decisions on tuition fee hikes are also highly likely to raise the cost of living before a recovery economy spurs workers' bargaining power and builds inflationary pressure.