Rising energy bills, labor shortages and winding lines at gas stations have made inflation a favorite topic of dinner conversations across the country.

But the debate has evolved in City’s strategy rooms, with professional investors now focusing their concerns on “stagflation,” the toxic combination of inflation and weak economic growth.

These fears have set in, more than half of City insiders polled by Deutsche Bank believing that the UK economy now faces a “high” or “very high” risk of stagflation. They predict a high probability of zero growth or economic contraction, combined with inflation “well above” the Bank of England’s 2pc target.

Jim Reid of Deutsche Bank said the results of his straw poll were worrying for investors. “If these numbers turn out to be correct, the stock markets could be massively mispriced,” he said.

The trigger that could halt growth, analysts say, is a sudden rise in interest rates, now more likely after the Office for National Statistics reported that job vacancies hit a record 1.2 million in September.

Laith Khalaf, of stockbroker AJ Bell, said: “Labor market dials point to rising interest rates, with vacancies at record highs, unemployment down and number of employees employees returning to pre-pandemic levels. “