There could be a downside to the surprisingly steady inflation rate

The core consumer price index of inflation held unexpectedly steady at 2.6 per cent in July, further removing any possibility of an interest-rate rise this year.

So what’s the downside? My eye is drawn to a bulletin from Nationwide, the UK’s most sensible mortgage lender. It reports a fall in quarterly profits after a rise in bad debts to £36 million from £16 million for the same period last year — small numbers but a significant trend — and its chief executive Joe Garner warns the sector to ‘balance its lending carefully’ as cheap-rate consumer credit continues to balloon while growth prospects decline. I’d say he’s right on the money.