Sunak’s inflation win: not all that it seems?
The headline figure may be tamed, but there's still the problem of a stagnant economy

When Rishi Sunak announced in January that he wanted to see inflation – then running at an average quarterly rate of 10.7% – "halve" by the end of the year, plenty of people "were inclined to smirk", said Simon English in the Evening Standard.
Given that the main drivers of inflation lay in global factors beyond his control, the pledge seemed like a hostage to fortune. Well, fair play to the PM, a man "who seems not overly blessed with good luck", for pulling it off.
This week's figures showed a sharp fall in headline inflation to 4.6% in October (a big drop from September's 6.7%), all but ensuring that he'll keep his promise. The fall is largely down to the end of the "energy crunch" and 14 consecutive interest rate rises – but it'd be "churlish not to give the PM a tip of the hat". On this score, at least, he can declare victory.
The Week
Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.

Sign up for The Week's Free Newsletters
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
'Pivotal moment'
Tory officials view the announcement that Sunak has met the first of his "five priorities" as a "pivotal moment", said George Parker in the FT: the juncture at which they can "start mapping out a more optimistic economic picture" ahead of next year's expected general election. "Better news on inflation is expected to be mirrored by a better than expected fiscal situation" when the Chancellor, Jeremy Hunt, delivers his Autumn Statement next week – giving him "some modest scope for targeted tax cuts". Harriett Baldwin, the Tory Chair of the Commons Treasury Committee, reckons that, despite the economy's travails, it will be a "feel-good" statement.
That would ignore the bigger picture, said Phillip Inman in The Observer. "Slower price growth, due partly to tighter Treasury purse strings, won't lift the gloom of a flatlining economy", which has expanded by just 0.6% over the past year, with little hope of imminent change. The Bank of England has signalled that interest rates will remain at their 15-year high of 5.25% for much of next year. In the meantime, "the long-term outlook for UK plc will be increasingly dismal".
'Plenty of reasons to be sceptical'
Is inflation really licked? One thing muddying the waters, said Kate Andrews in The Spectator, is this week's wages update, which showed that annual growth in regular pay rose by 7.7% between July and September – the "fastest in two years". The worry is that a "wage-price spiral" could lead to "a secondary wave of price hikes". There are plenty of reasons to be sceptical: "the underlying causes of inflation" are more closely linked to monetary decisions and "influxes in money supply"; and wages have only been rising in real terms for a few months.
But it matters because BoE policymakers "are inclined to lean into" the wage/spiral theory. Markets may think that we've reached the peak of rate hikes; but it isn't a done deal yet.
A free daily email with the biggest news stories of the day – and the best features from TheWeek.com
-
Does Reform have a Russia problem?
Talking Point Nigel Farage is ‘in bed with Putin’, claims Rachel Reeves, after party’s former leader in Wales pleaded guilty to taking bribes from the Kremlin
-
Five key questions about the Gaza peace deal
The Explainer Many ‘unresolved hurdles’ remain before Donald Trump’s 20-point plan can get the go-ahead
-
See the Northern Lights from these bucket list destinations
The Week Recommends The dazzling displays can be spotted across Iceland, Sweden and parts of Canada
-
Taking aim at Venezuela’s autocrat
Feature The Trump administration is ramping up military pressure on Nicolás Maduro. Is he a threat to the U.S.?
-
Comey indictment: Is the justice system broken?
Feature U.S. attorney Lindsey Halligan has indicted former FBI Director James Comey on charges of lying and obstructing Congress
-
Government shuts down amid partisan deadlock
Feature As Democrats and Republicans clash over health care and spending, the shutdown leaves 750,000 federal workers in limbo
-
Russia: already at war with Europe?
Talking Point As Kremlin begins ‘cranking up attacks’ on Ukraine’s European allies, questions about future action remain unanswered
-
Under siege: Argentina’s president drops his chainsaw
Talking Point The self-proclaimed ‘first anarcho-capitalist president in world history’ faces mounting troubles
-
Sarkozy behind bars: the conviction dividing France
In the Spotlight The former president of the republic has portrayed judicial investigation of his ties to Gaddafi regime as a left-wing witch-hunt
-
Shutdown: Democrats stand firm, at a cost
Feature With Trump refusing to negotiate, Democrats’ fight over health care could push the government toward a shutdown
-
TikTok: A little help from Trump’s friends
Feature Trump’s new TikTok deal would hand the app over to 'his billionaire allies,' ignoring national security concerns