Wake Me Up Before Huw Go-Go (raising interest rates)

I know it’s a Friday but we need to talk about inflation, if for no other reason then the Bank of England’s new chief economist is called Huw Pill and that’s surely worth keeping in your back pocket at dinner parties.

In a submission to the Treasury Select Committee, Pill told MPs that he held “great concerns” about inflation, whose current strength “looks set to prove more long lasting than originally anticipated.”

Granted, it’s not quite Mario Draghi’s “whatever it takes to save the euro”, but in monetary policy circles, them’s fightin’ words. Essentially, it’s an admission that inflation, initially said to be transitory as the world came out of lockdown and recession, may be a little more permanent.

And you don’t have to be an economist to see why. Prices are going up, and not just in attention-grabbing sectors such as energy. And wage rises in industries where labour shortages persist as EU migration falls away will add further pressure.

The Bank expects inflation to hit 4 per cent this year, double its target. As the Resolution Foundation’s Torsten Bell told the Financial Times recently, “Wages are going up for some people but prices are going up for everybody.”

Elsewhere in the paper, the UK reported 40,701 Covid cases on Thursday – the largest number in a month, while England’s infection level jumped from one in 85 to one in 70.

For context, at the peak of the second wave in early January, around one in 50 were estimated to have coronavirus.

In the comment pages, Anne McElvoy writes that Starmer cannot simply upbraid the wicked Tories and that self-belief means optimism — or what is politics for?

Speaking of which, we’ve got Matt Hancock writing the Friday Diary. Worth a read, I’d say.

And finally, after 30 years in the capital, Kylie Minogue is packing up her Knightsbridge penthouse and moving back to her native Australia. Paul Flynn reflects on the indelible mark she left on London’s gay scene.

Have a lovely weekend.

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