If you worried it was getting awfully close to Christmas and there might not be time for another West End Final about inflation, I have good news.
The headline Consumer Prices Index fell sharply in November to 3.9 per cent from 4.6 per cent the month before. This represents the lowest rate of inflation for two years, driven by a drop in the cost of petrol and diesel, along with an easing of the rate for a range of everyday groceries such as bread, eggs, pasta and soft drinks.
Now, I'm neither a mathematician nor a curmudgeon, but last time I checked, 3.9 per cent was virtually double 2 per cent, which is the Bank of England's official inflation target. That is why Governor Andrew Bailey is not yet rolling the pitch for interest rate cuts. 'Higher for longer' is still very much the public position.
Not least because getting rid of that last portion of above-target inflation could be the hardest part. As Ed Monk, associate director at Fidelity International, points out, "Wages may have peaked but remain high by historical standards". As a result, the Bank will want to be absolutely sure that sufficient demand has been squeezed out of the economy before it eases borrowing costs.
It may get a bit of help in that regard. Today, the consultancy Cornwall Insight forecasts that energy bills will fall by £270 this April, thanks to a drop in the wholesale price in recent weeks
The big political question of course is whether Rishi Sunak will get any credit – notwithstanding the fact that monetary policy isn't his responsibility. No doubt, the government will be in a far stronger position if real wages are rising in the six months prior to the election, as they were in 2015. But will people feel it? The Resolution Foundation's Torsten Bell puts it this way:
"We should be capable of recognising improvements while understanding that this doesn't mean our challenges have gone away i.e. big picture remains that since September 2021 food/energy prices are up 29% & 66% respectively."
The other issue of course is economic growth, or lack thereof. The OBR's forecasts for 2024 and 2025 are gloomy, yet they are positively Panglossian compared with the Bank of England's. Moreover, with labour markets still tight and assorted supply-side concerns, it is not obvious that the UK economy even has sufficient spare capacity to grow faster without generating inflation.
There is one aspect we can be more certain about. The idea – which gained popularity over the summer – that the UK was on a path to permanently high inflation compared with other high-income economies turned out not to be true. Prices are still rising faster here than in the US and Eurozone, but Britain is no longer an international outlier.
Which is not nothing. But while I've not run the focus groups myself, I remain unconvinced that 'No Longer an Outlier' carries the same electoral potency as 'Get Brexit Done'.
In the comment pages, Ahmed Fouad Alkhatib, an American writer who grew up in Gaza, explains what Palestinians in the Strip really think about Hamas. While Melanie McDonagh says Meghan Markle's embarrassing cameo shows she and Prince Harry have begun their inevitable descent.
And finally, which MPs top this year's Westminster Rizz Rankings? Londoner's Diary has all the gossip from SW1.
