No sooner had I potentially displayed my grievous ignorance of economics than a neat echo of my sense that all is not right in the nation’s fight against inflation arrives within the day. The Sunday Times has a report today that claims an recent independent survey has household essentials rising by 12 %.

I had missed the Daily Mail’s report on Thursday about prices to which the ST refers, but on looking at it I am made doubly uneasy both about the veracity and/or accuracy of the official measures of inflation: Retail Prices Index [RPI] and Consumer Prices Index [CPI], currently at 4.2% and 2.1% respectively in October.

It is the fact that these price rises seem to be impacting most upon ‘household essentials’ that worries the most. This is the stuff we all have to buy come what may. In that sense it affects every household in the land and is a real motor for inflation. Everyone finds their budget tightening and eventually this finds an outlet in increased wages. That is why one senses the fuss over police pay not just as an expression of justifiable outrage at the government’s behaviour over the arbitration award but as a sign that people are feeling more than just a pinch.

Inflation is a terrible scourge and a real destroyer of economies. It also destroys governments because it affects us all and all feel the its consequences. It thus inevitably fuels voters’ perceptions that a particular government’s claim to economic competence is bogus. If inflation is actually worse than the Office of National Statistics (ONS) tells us and their figures do not accord with people’s real life experiences (which usually comes on Saturday mornings as one spouse observes to another that something in their regular weekly buy has shot up in price), then that feeds into people’s distrust of Ministers (in this case Gordon Brown and Alistair Darling in particular) who try and tell us that inflation is either not too bad or is under control or not rising. Gordon Brown in particular can reel off the results of the latest Five Year Plan like the good Stalinist he is until he is blue in the face: people will simply not believe a word.

Which is why I find myself distrusting the inflation figures. They have every incentive to massage them (I believe in a genuinely independent ONS as much as I believe in a genuinely independent Bank of England or fairies at the bottom of the garden) and they are so at odds with one’s sense of what is going on that one is then moved to ask the next question: why are they being manipulated?

Thus we come back to the curious business of why the dog did not bark in the night, or rather why we were all whipped up into election fever in September and October (we know why that fever was defused, of course, that being Brown’s yellow streak). After all, why have an election only 2½ years into a Parliament when the Governing party has a comfortable majority and we are being told that all is well in this best of all possible worlds?

Look no further than the Town Rat Catcher himself: just out of ten years in the Treasury, Brown must be judged to have a fair idea of what is over the horizon. He and at least one of his Vicars On Earth, one Ed Balls, the latter being an economics geek, may well have concluded that some nasty economic shocks are on the way and that an election might have been a good idea. In which case what did they know and when did they know it?

I may be putting two and two together and getting five, but I confess to wondering if we are going to see a sharp deterioration in the economy next year: rising inflation, rising unemployment (the ONS currently rates this latter as having a slightly declining trend), credit problems and a continuing rise in fuel prices all contributing to some serious problems.

If so, Brown is finished. Never was there a more pithy expression of the key factor in most democratic national elections than the Clinton Campaign’s “It’s the economy, stupid”. His whole reputation having been built on the economy, any sense of significant problems in the UK economy will do for him.

In addition he has no one else to blame. having hogged the Treasury to himself against allcomers for all of Blair’s ten years, the economy is down to him. He has made his prudent conduct of the economy the very centrepiece of his claim to the Premiership, so when it goes wrong there will be no credence whatsoever in the plea ‘Not me, Guv!’ and no hiding place for Macavity.

He may well, therefore, come to regret his having become the longest serving Chancellor since Nicholas Vansittart held office from 1812-1823.

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