The Downing Street diary has a huge red ring circled on Wednesday morning when the Office for National Statistics releases its monthly inflation data.
O Politics in Jack and Sam’s house Podcast discusses whether the Prime Minister can use this week to create an economic turning point.
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Rishi Sunak hopes this will allow him to claim what he hopes will be seen as one of his strongest economic achievements – curbing price rises in the wake of Liz Trus’ government.
CPI inflation peaked at 11.1% when Sunak took power in October 2022.
Since then, it has fallen fairly steadily and is currently at 3.2%, with one government insider predicting it will reach 2.2%.
The government is likely to argue, whatever the precise outcome, that this represents a return to a “normal” pre-pandemic value. Over the previous 10 years, the average standard deviation was about 1%.
This does not mean that the next meeting of the Bank of England’s Monetary Policy Committee will automatically reduce interest rates from their 16-year high of 5.25% on 20 June.
This is partly due to the fact that inflation could rise again this year, when the effect of falling energy prices leaves the comparisons.
However, the Prime Minister is expected to be around and pushing this forward, as is Chancellor Jeremy Hunt on Wednesday. They will argue that inflation fell because of tough decisions – code for tax cuts that other Conservatives wanted but No 10 didn’t.
This is really important because, of course, the Conservatives’ central argument in the election will be: stick with the plan, it’s working. And the big bet – or perhaps a vague desperate hope – within number 10 is that, when we go to the polls in November, the situation will really start to look like this.
This week, the energy price ceiling could help with this goal.
On Friday, regulator Ofgem is expected to make an announcement at 7am and is expected to fall by more than £100 to the lowest level in more than two years.
This means energy bills should be £500 a year less than last summer. Then again, although they are still much higher than they used to be, there is a slow feeling of normalization.
This story originally appeared on News.sky.com read the full story
