here is much fat to chew on in today’s inflation figures.
On the face of it there should be at least two cheers for the moment when headline CPI falls below wage growth. It has been a long time coming.
But the reaction from the City was pretty underwhelming, little more than a “meh” shrug.
That is partly because the CPI figure came in bang on forecast. But also it did not take much of a drill down into the data to realise that the inflation war is a long way from won.
Today represents one battle, albeit a significant and symbolic one, in a long campaign that is far from played out.
The rise in services inflation appears to be a particular worry. This is driven far more by wages than the inflation figure for goods, which is much more closely tied to other input costs such as energy.
Wages are the real concern now for the Bank of England. Barring another geopolitical disaster — and on the evidence of recent years who would bet against it — the energy driven phase of the prices surge is coming to an end.
Now it is all about pay and how those fuller salaries will keep the wheels of the economy turning — and inflation sticky.
There are signs of stress — the headline unemployment rate is obviously the key one to watch — but they are relatively small clouds in the horizon for now.
The remarkably robust June property market figures from the Land Registry suggest that, for all the interest rate bombardment from Threadneedle Street, there are still few signs of the long predicted crash.
It will take at least one, possibly two, turns of the interest rate screw before the Bank can consider its work done. Prices are down — very slightly — year on year but still only a few percent below all time highs.
Inflation may be down, but it is far from out.