Next week could see inflation scares in the UK and US – though they might not be wholly justified.
Tuesday’s numbers could show another rise in UK consumer price inflation, to just under 2 per cent. This, though, would be due in part to a base effect – a fall in petrol prices last May drops out of the annual data – rather than to new price rises.
Base effects will be even more spectacular in wage inflation data on Tuesday. These could show a jump to around 7 per cent. But this would be because a cut in hours last April reduced weekly earnings. The level of wages in April was probably below that of November. That’s unsurprising given that there are still some 3.5m people either officially unemployed or out of the labour force wanting work, and an illustration of the fact that inflation can rise without recent increases in costs.