So much for team transitory. Average earnings excluding bonuses rose by 7.3 per cent in May, above forecast and in line with the previous reading. In other words, inflation appears to be bedding in.
These figures will heap yet more pressure on the Bank of England to raise interest rates further still. Indeed, some City analysts now predict rates will peak at seven per cent, intensifying the pain for borrowers. Meanwhile, such high wage growth will make it harder for the Government to ignore the recommendation of independent pay review bodies when it comes to public sector pay.
The temptation for any chancellor, particularly with an election no more than 18 months away, would be to pursue a quick fix — perhaps even a tax cut — to buy off voters. The reality is that option no longer exists.
The Conservatives must remain laser-focused on squeezing inflation out of our economy. That means letting the Bank of England execute monetary policy, while doing no harm through fiscal policy and leaving no stone unturned to fill the more than one million job vacancies fuelling a tight labour market.
Given that conditions may deteriorate before they improve, it is entirely possible that Jeremy Hunt will receive no credit for any sound stewardship of the economy from this point. He should do so anyway.
BBC’s gathering storm
The media storm over a BBC presenter allegedly paying a teenager tens of thousands of pounds for explicit images shows little sign of abating.
In a letter reported by the corporation, the lawyer representing the young person said “nothing inappropriate or unlawful” had taken place between their client and the presenter, calling the claims “rubbish”.
The changing nature of the story ought to serve as a reminder that the BBC, caught in an invidious position, has been right to follow due process, carry out inquiries and make contact with police. As for everyone else, rushing to judgment — particularly on social media — could prove an expensive error.
Table for Lily Allen?
In the increasingly unlikely event that Lily Allen still can’t find a decent place to eat in London, she has not much longer to wait. Jeremy King, co-founder of The Wolseley and Brasserie Zédel, has announced a new restaurant called The Park, in the style of the classic European grand café he made so famous.
Located opposite Kensington Palace Gardens, it promises to be fit for a pop star.
