Workplace embarrassment isn’t a phrase you normally associate with inflation.
Thoroughgoing pain in the wallet. Job-killing disaster. Poverty-inducing crisis, maybe.
For the folk who work at the Treasury and the Bank of England it is turning into an agitation bordering on a humiliation.Tomorrow we get the inflation figure for June, with the City assumption that it will be down from 8.7% in May to 8.3%-ish now.
(That doesn’t mean things are getting cheaper of course, just more expensive a bit less quickly.)
The embarrassing bit is that despite 13 successive Bank of England interest rate rises, our inflation remains an outlier among many major countries and some that we might normally scoff at.
In the US, inflation is at a two-year low of 3%. In Japan, it’s 3.2%. War-crazy Russia? 3.2%.
Perpetually screwed-up Brazil? Also 3.2%.
Now, in Venezuela it’s 1200% and in Sudan it’s 340%, but I’m guessing Jeremy Hunt isn’t going to offer those as examples of how we’re really not doing so badly.
One reason all this is so awkward is that historically, US and UK inflation rates have tended to, if not track each other, at least be roughly in line.
And the Bank started raising rates here in the autumn of 2021, well before the US Fed or indeed the European Central Bank.
So we’ve been on the only medicine the Bank seems to have for longer, with worse results.Maybe the Bank, and the Government, could begin to suggest that fiscal intervention — government action — is needed here, rather than just another dose of monetary leeches.
