Tories’ self-congratulatory response to inflation fall was totally nauseating
THE Tory’s nauseatingly selfcongratulatory response to the inflation data this week was as irksome as it was predictable.
And, for the avoidance of doubt, the response was utterly inevitable.
Data published on Wednesday by the Office for National Statistics showed annual UK consumer prices index inflation dropped from 6.7% in September to 4.6% last month.
The ONS noted this was the biggest monthly fall in inflation since April 1992.
We had this from Chancellor Jeremy Hunt on social media platform “X”: “Beating back inflation has been this Government’s number one priority. It’s now half what it was – down from 10.7% to 4.6%. That’s thanks to deliberate action we’ve taken being disciplined on spending, helping people into work, and resisting calls for additional borrowing.”
The 10.7% refers to the annual CPI inflation rate in November last year.
This rate was more than five times the target set for the Bank of England by the Treasury, and only a touch adrift of the 41-year high of 11.1% set in October last year.
From Rishi Sunak’s office, we had this post on X on Wednesday: “In January, the Prime Minister @ Rishisunak made halving inflation one of his top priorities. Today, that’s been achieved with inflation now at 4.6%.”
The post from the Prime Minister’s office was accompanied by an at times spinning, at times swirling and at all times entirely over the top video clip. This lasted only about nine seconds but it seemed a lot longer.
It is indeed quite the stunt the Conservatives have pulled on inflation. However, it is important that people see through it.
Mr Sunak, understandably unpopular in the polls given his many failures as Conservative leader and previously as chancellor, declared in January that the Tories would halve inflation.
On Wednesday, from Rishi Sunak’s own account on X, we had this: “In January, I made halving inflation this year my top priority. I did that because it is, without a doubt, the best way to ease the cost of living and give families financial security. Today, we have delivered on that pledge.”
There are at least three crucial points in assessing what has actually happened.
Firstly, it was inevitable because of base-year effects that annual CPI inflation was going to tumble, so Mr Sunak chose to target something that was essentially inevitable.
One good illustration of this is that the fall in annual inflation between September and October was entirely down to base-year effects in an overall sense, with the consumer price index unchanged month-on-month. The index had risen by 2% between September and October 2022.
And Martin Beck, chief economic advisor to the EY ITEM Club, observed: “With household energy bills rising by more than 20% between September and October 2022, but falling by close to 10% in the same period this year, a sizeable fall in inflation in October had been on the cards.”
The second point is that it is not the Conservatives who control monetary policy. The Bank of England sets interest rates with a mandate to keep annual CPI inflation at 2%. In spite of its spectacular failure to achieve this target in recent times, the key point is that the Bank has independence in setting interest rates.
Thirdly, the Conservatives have fuelled inflation, notably through their hard Brexit.
It is difficult to see anything at all of note that they have done to bring inflation down, in spite of what Messrs Sunak and Hunt appear at pains to convey.
And a vital general point about where we find ourselves now is that UK inflation is still more than twice the 2% target.
Prices are still rising at a rapid rate. And previous increases are baked in – the misery from the
UK’S inflation woe is permanent.
It is also worth remembering the Tories were as keen to play up global factors when trying to make excuses for the UK’S embarrassingly high inflation rate in an international context as they now are to claim credit for the fall.
In terms of hoping that people get to the truth of the matter, it was heartening to see a press release headed “halving UK inflation little to do with government action” wing its way into the email inbox from the Institute of Chartered Accountants in England and Wales.
Suren Thiru, economics director at the ICAEW, said: “While the
Prime Minister has achieved his target to halve inflation this year, this owes more to the downward pressure on prices from falling energy costs and rising interest rates than any government action.”
However, regardless of reality, it was always a racing certainty that the UK Government would be desperate to claim credit for a fall in inflation, amid the wreckage arising from its myriad economic policy failures.
As was observed in this column on January 6: “It is often the way with politicians across the spectrum that they use words in a manner which might make the electorate think that something is impressive, or at least much better than it is in reality. Mr Sunak’s pledge that the Conservative Government will ‘halve inflation’, in his ‘building a better future’ speech, took things to a whole new level. Annual UK consumer prices index inflation hit a 41-year high of 11.1 per cent in October, before dipping to 10.7% in November, still more than five times the 2% target set for the Bank of England by the Treasury. So halving inflation would still leave it at eye-watering levels. It would also be a touch amusing that Mr Sunak is talking about it being the Government which will halve inflation, if the cost of living crisis were not so very serious for millions of households
“The Government most certainly does not have total power over inflation, as Mr Sunak seems to be implying. Does the Prime Minister think he no longer needs the Bank of England to deliver on an inflation target, if the rate of price increases is all somehow down to the Government?”
For households and businesses, the UK’S inflation crisis has brought misery.
However, it is difficult to shake the notion that this is all a big game to Messrs Sunak and Hunt, as they pat themselves on the back for what was an inevitable eventual fall in inflation from mortifyingly dizzy heights, that has had precious little to do with them.
People need to see the situation for what it is, and not be fooled by the wave of propaganda we are likely to hear in the run-up to the next General Election from the grandstanding Tories about how it was them who halved inflation.
It is difficult to see anything at all of note that they have done to bring inflation down