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Charting a grim historical note as inflation tops 9%

·1-min read
The Prime Minister now presides over an inflation rate approaching its Thatcherism highs   (Leon Neal/PA) (PA Wire)
The Prime Minister now presides over an inflation rate approaching its Thatcherism highs (Leon Neal/PA) (PA Wire)

I am grateful to Susannah Streeter, markets analyst at Hargreaves Lansdown, for providing a pop chart context to today’s inflation figure.

Apparently the last time consumer prices were rising at 9.1% in March 1982 the appropriately named Tight Fit were at Number One with ‘The Lion Sleeps Tonight’. But interest rates were then at 13.5% rather than today’s 1.25%. The contrast with today could not be more stark.

No one is suggesting rates will go anywhere near as high as that in this cycle but it does raise the question how high — and for how long? There are few signs yet of any let-up in the inflationary spiral that could provide relief for Governor Andrew Bailey.

Yesterday there were more gloomy projections from energy analyst Cornwall Insight, which now sees the household energy cap breaching £3000 by the New Year. That would place an intolerable burden on millions of lower- and middle-income households and put pressure on Rishi Sunak to provide yet another round of support in the autumn Budget.

There was a tiny sliver of hope today from housebuilder Berkeley whose boss Rob Perrins said he was seeing the first sign of “stabilising” in his industry’s cost inflation.

The oil price has also come off its red-hot heights this week and is down nearly 5% today. A mere pause or something more hopeful to cling on to?

We can only hope that another chart-topper of 40 years ago — ‘Do You Really Want to Hurt Me?’ — does not prove prophetic.

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