Inflation is coming down – but when will we start to feel better off?

Despite this week’s inflation update, broad consensus remains that the headline rate is going to fall – significantly – this year. One of those people is the governor of the Bank of England. Andrew Bailey has told Media Wales that ‘a corner has been turned’ on those price hikes, as it appears the consumer prices index (CPI) has peaked and is now on a downwards trajectory.

Bailey, ever the optimist, has a bad track record on these kinds of predictions. Having insisted for the better part of 2021 that inflation would simply be ‘transitory’, he and the Bank underestimated price hikes at almost turn, always playing catch-up with interest rate hikes. But while the double-digit inflation rate is, in part, Bailey’s responsibility, his predictions for inflation are now backed up by other major institutions. The Office for Budget Responsibility, the CBI, and indeed the government are saying the same – the latter is so confident about inflation coming down that Rishi Sunak and Jeremy Hunt are actually trying