In the run-up to the spring budget just over a month ago, Downing Street had good reason for optimism. Inflation was forecast to fall significantly, hitting 2 per cent in May, and the consensus among economists was that there could be as many as three interest rate cuts this year.
That optimism looks increasingly misplaced, in part because of events in the US where levels of inflation have been persistently higher than expected. Jerome Powell, the chairman of the Federal Reserve, has said that interest rate cuts are unlikely until later this year.
Where the US leads, the UK tends to follow. Official figures published on Wednesday morning showed that inflation fell more slowly than expected last month, reaching 3.2 per cent rather than the
