View all newsletters
Sign up to our newsletters

Support 110 years of independent journalism.

  1. Politics
  2. Budget 2021
8 October 2021

The big risk to Boris Johnson isn’t Labour – it’s inflation

The threat of a Bank of England interest rate rise looms over the Conservatives’ poll lead.

By Stephen Bush

The Bank of England’s chief economist, Huw Pill, has told MPs that the “magnitude and duration of the transient inflation spike is proving greater than expected”. In other words: the increase in inflation we are seeing is still in his view a passing phenomenon, but a larger and longer-lasting passing phase than he had previously thought.

Pill’s words matter because he is one of the nine members of the Bank’s monetary policy committee, which sets interest rates. Although the increase that traders anticipate (from 0.1 to 0.75 per cent) is vanishingly small by historic standards, a generation of consumers have known more than a decade in which rates have stayed ultra low, and the political and social impact if rates return even to the levels seen before the financial crisis is uncertain.

Added to that, it will fuel the belief at Westminster that this transient spike in inflation is anything but transient: that once the HGV driver shortage is resolved by paying higher salaries to drivers, this will inevitably lead to inflation in supermarkets, restaurants and across the rest of the economy – and that’s before you remember the spike in energy costs that will fall first on industry but will make their way to the consumer in the long run. 

Inflation was the ghost at the feast at Conservative Party conference, in which MPs and Spads were debating their good fortune in still enjoying a lead over Labour. For some, that the fuel shortages and the rise in prices hasn’t led to a Labour lead is a sign that Keir Starmer will never find a way to win. But others fear that the headline figures are a lagging indicator, and that the pressures of inflation, the Universal Credit cut and next April’s tax rises mean that this week is peak Tory.

Select and enter your email address The New Statesman's quick and essential guide to the news and politics of the day. The best way to sign up for Morning Call is via morningcall.substack.com Your weekly guide to the best writing on ideas, politics, books and culture every Saturday. The best way to sign up for The Saturday Read is via saturdayread.substack.com Our Thursday ideas newsletter, delving into philosophy, criticism, and intellectual history. The best way to sign up for The Salvo is via thesalvo.substack.com Stay up to date with NS events, subscription offers & updates. Weekly analysis of the shift to a new economy from the New Statesman's Spotlight on Policy team.
  • Administration / Office
  • Arts and Culture
  • Board Member
  • Business / Corporate Services
  • Client / Customer Services
  • Communications
  • Construction, Works, Engineering
  • Education, Curriculum and Teaching
  • Environment, Conservation and NRM
  • Facility / Grounds Management and Maintenance
  • Finance Management
  • Health - Medical and Nursing Management
  • HR, Training and Organisational Development
  • Information and Communications Technology
  • Information Services, Statistics, Records, Archives
  • Infrastructure Management - Transport, Utilities
  • Legal Officers and Practitioners
  • Librarians and Library Management
  • Management
  • Marketing
  • OH&S, Risk Management
  • Operations Management
  • Planning, Policy, Strategy
  • Printing, Design, Publishing, Web
  • Projects, Programs and Advisors
  • Property, Assets and Fleet Management
  • Public Relations and Media
  • Purchasing and Procurement
  • Quality Management
  • Science and Technical Research and Development
  • Security and Law Enforcement
  • Service Delivery
  • Sport and Recreation
  • Travel, Accommodation, Tourism
  • Wellbeing, Community / Social Services
Visit our privacy Policy for more information about our services, how New Statesman Media Group may use, process and share your personal data, including information on your rights in respect of your personal data and how you can unsubscribe from future marketing communications.
THANK YOU

Content from our partners
Labour's health reforms can put patients first
Data science can help developers design future-proof infrastructure
How to tackle the UK's plastic pollution problem – with Coca-Cola

Topics in this article : ,
Select and enter your email address The New Statesman's quick and essential guide to the news and politics of the day. The best way to sign up for Morning Call is via morningcall.substack.com Your weekly guide to the best writing on ideas, politics, books and culture every Saturday. The best way to sign up for The Saturday Read is via saturdayread.substack.com Our Thursday ideas newsletter, delving into philosophy, criticism, and intellectual history. The best way to sign up for The Salvo is via thesalvo.substack.com Stay up to date with NS events, subscription offers & updates. Weekly analysis of the shift to a new economy from the New Statesman's Spotlight on Policy team.
  • Administration / Office
  • Arts and Culture
  • Board Member
  • Business / Corporate Services
  • Client / Customer Services
  • Communications
  • Construction, Works, Engineering
  • Education, Curriculum and Teaching
  • Environment, Conservation and NRM
  • Facility / Grounds Management and Maintenance
  • Finance Management
  • Health - Medical and Nursing Management
  • HR, Training and Organisational Development
  • Information and Communications Technology
  • Information Services, Statistics, Records, Archives
  • Infrastructure Management - Transport, Utilities
  • Legal Officers and Practitioners
  • Librarians and Library Management
  • Management
  • Marketing
  • OH&S, Risk Management
  • Operations Management
  • Planning, Policy, Strategy
  • Printing, Design, Publishing, Web
  • Projects, Programs and Advisors
  • Property, Assets and Fleet Management
  • Public Relations and Media
  • Purchasing and Procurement
  • Quality Management
  • Science and Technical Research and Development
  • Security and Law Enforcement
  • Service Delivery
  • Sport and Recreation
  • Travel, Accommodation, Tourism
  • Wellbeing, Community / Social Services
Visit our privacy Policy for more information about our services, how New Statesman Media Group may use, process and share your personal data, including information on your rights in respect of your personal data and how you can unsubscribe from future marketing communications.
THANK YOU