Michael Simmons

Reprieve! The British consumer has received a stay of execution. Figures just released by the Office for National Statistics (ONS) show inflation last month fell to 2.8 per cent – down from 3.3 per cent in March and by more than most economists had forecast. But don’t bother reading the ‘corner has been turned’ press release that the government will issue later, because today’s improvement is sadly not about to become a trend. Rachel Reeves has played some part in these figures: by removing various energy levies from household bills and freezing some other regulated costs. That's meant price rises in April were not as bad as they might otherwise have been. But the real reason the figures have come down is because of how bad Awful April was last year.

This may be barely concealed trauma from my time as a Scottish civil servant but, when I look at Andy Burnham, I see Nicola Sturgeon.  The cultivated public image of Labour’s miracle man in the north is a powerful one. He pulls off the ‘one of us’, ‘man of the people’, ‘our lad done good’ shtick better than most politicians – in spite of his Blairite origins. Sturgeon wielded a similar power. It always surprised me how popular she was with the mums. As long as she said ‘sorry’ occasionally, most people – even those who did not vote for her – were sympathetic and felt she was often unfairly criticised during her nine-year tenure as first minister. Burnham seems to possess some of that voter appeal and, in turn, that political immunity too.

Reality Check verdict: false You know things are hotting up in Westminster when reporters start unironically using the word ‘febrile’. Today, we’re well past febrile. So much so that Westminster turmoil seems to be spilling out into the markets, sending gilt yields (the government borrowing cost) skywards. For one Labour MP though that’s no problem. Speaking on Times Radio yesterday, Paula Barker claimed ‘the markets will have to fall into line’ and that investors would flood to Britain for ‘progressive policies that do speak to our communities’. Reality Check asked one investor for their views of the MPs comments and the response was unprintable.

In a relief for mortgage holders, anyone with a job and the government, the Bank of England’s Monetary Policy Committee (MPC) has voted 8–1 to hold interest rates at 3.75 per cent. That is despite rising inflation thanks to the Iran war, which is likely to hit Britain worse than almost anywhere else. Had it not been for the war and the disruption to energy supplies through the Strait of Hormuz, April was to be the month when the Bank of England finally met its 2 per cent inflation target. Instead, prices are shooting in the wrong direction as energy costs feed through to the wider economy – most notably in fuel.

The Iran war is being felt in Britain’s economy. Figures just released by the Office for National Statistics (ONS) show inflation rose to 3.3 per cent in March – up from 3 per cent the month before.  The rise was mainly driven by fuel prices, which jumped at their fastest rate in more than three years. Plane tickets and food prices shot up too as rising energy and input costs were felt across the raw materials that drive the economy.  A Consumer Prices Index increase thanks to the oil price spike was expected but the trouble is these higher manufacturing input costs take time to feed through into the economy meaning this new bout of inflation could be a prolonged one.

On the face of it, the Office for National Statistics (ONS) have just released great news on unemployment. The rate – against all expectations – has fallen from 5.2 per cent to 4.9 per cent. Radio 4’s Today programme welcomed the ‘surprising’ news. But this is no good news story. To be classed by statisticians as unemployed you have to be actively seeking work. If you’re not then you’re put in the ‘economically inactive’ category. And that’s the bad news: whilst the unemployment rate has decreased, so too has the employment rate. What’s gone up is the inactivity rate – accounting for almost all of the change in unemployment. So what’s going on?

Rachel Reeves lands in Washington tonight to be greeted with bad news. The International Monetary Fund (IMF) – whose spring meeting the Chancellor is attending – has just handed Britain the largest GDP downgrade of any G7 country.  In the freshly released update to their world economic outlook, the IMF forecast growth for the UK this year of just 0.8 per cent – down from the 1.3 per cent they’d previously projected. Things don’t get much better next year either, with just 1.3 per cent growth forecast, again downgraded from 1.5 per cent.  This downgrade singles out Britain and our European neighbours.