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UK inflation was apparently just 1.6pc during the year to March. That’s a four-year low. The Consumer Price Index has now fallen for six consecutive months – the first time that’s happened since the CPI inflation measure was introduced in 1997.

For more than five years, stubbornly high inflation has coincided with job market weakness and a related fall in earnings. As a result, average real wages have plunged by around 10pc, the most severe squeeze on post-inflation pay in this country for more than half a century.

That’s why there’s much excitement in political circles that rock-bottom inflation is now coinciding with faster nominal wage growth. After increasing by 1.4pc and 1.5pc in 2012 and 2013 respectively, average earnings rose by 2pc year-on-year during the three months to February.
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