Anyone inclined to give the government credit for today’s fall in inflation might wonder how much better they could have done were they not a squabbling bunch of reshuffled egos who plainly can’t stand each other.
The housing crisis would be solved. The NHS a gleaming model of how to do health care. International wars; what international wars?
The more prosaic truth is that inflation is out of its control in either direction. There’s not a lot it or the Bank of England could do about the energy shock that followed Russia’s invasion of Ukraine. Nor about the entirely depressing Israel/Gaza situation.
Rishi Sunak’s bet was that electricity and food price pressures would ease in time for Christmas. They haven’t stopped going up remember, they are just rising less quickly.
Today he gets to say he won that bet and given his luck in general, let’s allow him to bask in that for a bit.
An obvious extra boost is that the Monetary Policy Committee at the Bank of England now has no need to ramp up rates beyond the present 5.25%.
The three members who voted to do so at the November MPC meeting -- Megan Greene, Jonathan Haskel and Catherine L Mann – are today locked in their offices, avoiding colleagues who thought they looked out of line then and miles off the pace now.
From a practical point of view, if you are presently renegotiating a mortgage deal the best move must be to crack on.
Yesterday Halifax, HSBC and First Direct all offered newer, better deals. Halifax is offering a 5-year fix for borrowers with a 40% deposit at 4.53%.
Those aren’t the super cheap 2% deals of old. But they aren’t bad and will certainly look like good offers if there is another energy shock and inflation returns with vengeance.
There’s a lot to be said for stability and visibility of what the future might look like. Just ask the PM.
