A year away from a general election, economics has never been more political.
Inflation has fallen for six months in a row to reach 1.6% and tomorrow’s jobs figures should show wage growth inching above it — to 1.8% — for the first time since 2008.
For the Chancellor, it’s even better news after the IMF’s newly optimistic prognosis for the UK this year: he can tell a story of a “Goldilocks” economy with high growth and low inflation.
For Labour, still banging the cost-of-living drum, it looks more of a headache as real wages begin a tentative recovery.
The truth is more nuanced, as Debenhams boss Michael Sharp points out today. The economy is growing, house prices are surging: but few consumers hearing the good news are actually prepared to spend any more yet. Real wage growth is good — a turning point no less — but set against a five-year squeeze and the high cost of essentials there’s a lot of ground to make up. Don’t expect cautious consumers to stampede to the shops.
