Because the Workplace for Nationwide Statistics has famous this morning:

• The Client Costs Index (CPI) rose by 10.1% within the 12 months to March 2023, down from 10.4% in February.
• On a month-to-month foundation, CPI rose by 0.8% in March 2023, in contrast with an increase of 1.1% in March 2022.

That’s disappointing. This small decline contrasts markedly with expertise in Europe:

Charges are tumbling in the way in which I might anticipate in France (a bit) and Germany, particularly. Why aren’t they right here? The reply seems to be within the rigidity of our vitality pricing, and Brexit (after all).

Coping with vitality pricing first, this chart provides some indication of its significance:

The massive inexperienced band is family prices and by far the biggest improve in that’s vitality prices. Because the rigidity is our rigged markets is not going to let these fall but we’ll endure larger inflation for for much longer than Europe. The message may be very clear: we have to change vitality value regulation.

The opposite giant part, in blue, on the high, is meals. This isn’t fully all the way down to Brexit, but when we’re in search of variations with the European expertise, it most positively is.

None of this adjustments my argument that inflation will tumble this 12 months. Power value caps are going to be a lot decrease within the second half of the 12 months. Inflation will fall then.

Nothing additionally on this knowledge does something to alter the argument that this inflation is all about some corporations exploiting inflation for achieve. It isn’t wages driving inflation: they’re lagging far behind it.  Earnings are what are retaining us worse off. Revenue taking and the dogmatic refusal of our legislators to deal with the catastrophe that’s Brexit are what are retaining UK inflation larger than it must be.