Will hitting inflation target improve Tory fortunes?

The headline annual rate of consumer price inflation has hit 2 per cent bang on the official target, and for the first time in three years.

- SEAN O'GRADY

It's obviously encouraging news, and the Conservatives will be hoping that it gives them a boost during what's been a difficult campaign. It was, after all, running at 11.1 per cent in the year to October 2022.

According to the chancellor, Jeremy Hunt, the rate is low by international standards, and: "That would not have happened under Labour, [who] refused to condemn the public-sector pay strikes that would have meant inflationary pay rises, inflation lasting longer.”

However, underlying “core” inflation, excluding volatile food and fuel prices, is still running relatively high at 3.5 per cent, as it is in the services sector (5.9 per cent), while wages are still going up at about 5 per cent a year. These are also key measures monitored by the Bank of England. Experts therefore don’t expect an interest-rate cut before August, at the earliest.

How much of the credit should go to the government?

Some. Critics say that ministers always insist, when inflation is high, that it has nothing to do with them and is all about global factors; but when it comes down, for whatever reason, suddenly they try to take all the credit. Thus, when the work and pensions secretary Mel Stride pitched up at Sky News, he said “We’ve brought inflation down,” to which the acerbic interviewer, Kay Burley, replied: “That’s nothing to do with you, is it?”