This morning’s surprise update from the Office for National Statistics shows headline inflation at 9.9 per cent on the year to August, down slightly from 10.1 per cent in July. While consumer inflation remains at a 40-year high, the drop from double digits back into single digits has the optimists whispering: might inflation have peaked?
This update is no doubt good news, but this is likely to be a brief moment of calm in an ongoing storm. The slight fall in headline inflation has primarily been driven by easing fuel prices, as the cost of oil has been on a downwards trajectory. That at least is an early sign that global markets are starting to fill in the gaps created by the West’s decision to shun Russia’s crude oil supplies. But energy pressures are all but certain to worsen in the coming months when demand spikes; the real test of Europe’s efforts to find alternative sources of energy will be in the colder months and even in the best-case scenarios everyone is expecting an expensive winter.
While
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