Our favourite autoeconomist:
Inflation in the UK has fallen below 5%.
I am not surprised. I always said it would. Supply chain disruptions after Covid were, inevitably, resolved. The disruption from the war in Ukraine proved to be the result of stupidity in the commodity markets, and prices returned to pre-war levels, as I expected. And so inflation was always going to go away.
Inflation always works like that. After a period of inflation – most of which periods are of very short duration – things go back to normal.
Always, eh? Venezuela, Zimbabwe, Argentina, they show that.
And now Rishi Sunak is claiming credit.
He should not be. This was a phenomenon that was largely beyond his control.
Barring one thing, that is. He could have made the impact of inflation much less than it was if only he had told the Bank of England to do nothing to tackle it.
Now, me? I’m going to put a little faith in this money supply size theory thing about inflation. On the grounds that it probably is about right, d’ye see?
M1 being the thing that the central banks larlgey controls and which QT reduces, M4 being the wider thing not directly controlled but heavily influenced by interest rates. But, you know, maybe that’s just me and the entire economics profession there. What’s what when cofronted with Spud?