- There are two substantial base effects that will bring inflation down this year
- The economy has been much more resilient, that is good news
- We were sitting here in November saying it was going to be a long recession
- And that has not transpired
- Unemployment has remained historically very low
He’s not wrong in the sense that at the turn of the year, it was all doom and gloom for the UK economy and things have definitely held up better than anticipated. But what will be worrying is that we are now seeing a downturn in the economy and a lot of the same issues have not gone away or abated significantly. Inflation is still high (especially services inflation), wages are running hot, and the cost-of-living crisis is still ongoing.