The UK government (and consumers to some extent) will be relieved to see today to see that inflation fell to a 15-month low of 7.9% in June, down from the previous month’s 8.7% (the high was 11.1%.) This is still way ahead of other European countries and the US (3%) but better than most expected.
Interestingly the two main factors credited for the fall are fuel and food prices, both largely determined by Britain’s big supermarkets. Recently the supermarket bosses have been given a ticking off by the Government and others for so-called “price-gouging,” taking the opportunity offered by inflation to whack up their prices.
This produced a predictably indignant response with many on the political right joining the supermarkets in saying this was an outrageous attempt to interfere with free markets (not that the aforementioned markets seemed to be doing the rest of us much good.)
But food and fuel are falling – now why is that? Is it just that supply chain costs are reducing or have the supermarkets reined themselves in?
In reality it’s probably a bit of both. But supermarkets, energy companies, brand owners and others who have been busily restored their post-pandemic margins while saying it’s all Vladimir Putin’s fault have surely been found out.
From here it looks like a rare win for the embattled government, in particular chancellor Jeremy Hunt. Mind you, with three, by-elections to come this week it might be short-lived.
For Britain’s big businesses (and their serried ranks of agency advisers) this is surely a wake-up call.