A little respite, but tough times still ahead

Already under fire for her controversial visit to China amid worrying economic headwinds, it will come as great relief to the Chancellor that the predicted rise in inflation failed to materialise.

While still above the Bank of England's two per cent target, the small cut in the Consumer Price Index should clear the way for a cut in interest rates next month, relieving growing pressures on the economy.

But while the fall is undoubtedly welcome, it is probably not time to crack open the champagne just yet. This month's rise in the energy price cap has yet to feed into the figures, and the real test will come in April when the increase in National Insurance comes into force.

Retailers have already warned that the rise will feed its way into higher food prices and job losses, with economists fearing the double whammy of 'stagflation', where the economy stagnates while prices rise.

The impact of the coronavirus, and lockdown in particular, continues to cast a shadow over economies across the world, and the UK has been no exception. And with little sign of a resolution to the conflict in the Ukraine, we are unlikely to see a fall in energy prices any time soon.

The main lesson from Labour's first seven months in government is that it is much easier to criticise from opposition than it is to deal with the challenges of high office.

The Prime Minister has delivered his vote of confidence in the Chancellor of the Exchequer, saying she is in the job for the long haul. 

As well he might. Because given the gloomy outlook, the real question is: who else would actually want the job?