At the same time, there are signs that inflation could start rising again after the summer – not least due to energy prices. So far during May, oil has averaged around $84 (£66) per barrel. That’s some 14pc up on the average of $74 during May 2023 – a significant rise that will feed directly into the inflation numbers due to be published next month.
And as we go into the summer, such year-on-year “base effects” will likely become more important, as global growth gathers momentum, pushing up energy prices further. And that’s before considering elevated geopolitical dangers, spanning from the Russia-Ukraine conflict to the prospect of heightened turmoil in the Middle East, both of which could inflate energy and food prices even more.
US inflation is currently 3.4pc, up from 3.1pc back in January. Traders and investors are increasingly concerned that a similar “reversal” could happen in the UK, hemming in any inclination the MPC may have to cut rates any time soon.
There are, of course, political reasons why Sunak called a surprise early election on July 4. No 10 clearly now fears that, over the summer, clement weather could allow the number of illegal migrant Channel crossings to sky-rocket – making a mockery of Sunak’s pledge to “stop the boats”.
When it comes to the Post Office Horizon scandal as well, the fear is that the news will get a lot worse before it gets better.
The same is true of the Grenfell tragedy – in which 72 people died back in 2017. The final report into the London tower-block inferno, due for publication in September, is already on the Prime Minister’s desk.
It makes for grim reading – not least because, five years on from the first report into the Grenfell blaze, the Tories are yet to implement some of the key recommendations. Better, then, to go to the country before such a shocking report is published.
Faced with the prospect of more defections to Labour over the coming months it’s little wonder the Prime Minister brought this deeply ineffective Parliament to an end. But the main reason for this snap election, in my view, is that the Tories’ “go long, it’s the economy stupid” strategy lies in ruins.
