By johnredwood on December 19, 2024

Five months in, several months talking down the economy and a bad tax raising budget have done damage. Inflation is up from 2% to 2.6% on the CPI. Unemployment us up and job vacancies well down

On the ONS preferred wider measure of inflation including housing costs inflation is back up at 3.5%. Rents are shooting up thanks to a shortage of homes and further demand surges from high levels of migration. Wage inflation led by inflationary public sector awards with no productivity promises is sticky. The hike in National Insurance and other wage costs is keeping inflation in services too high.

The Bank of England should not cut interest rates until the pay and productivity issues are sorted out.