Despite what the fearmongers would have you believe, the latest inflation figures showed that inflation remains well under control. Not only is there no need for any more rate rises, but doing so would only increase the likelihood of unemployment rising, with little actual impact on inflation.

There’s always danger with reporting on inflation figures because there’s more than enough figures flying around to enable commentators and politicians to push out a scare quote that has people thinking inflation is running rampant and, God help us, we’ll be soon carting around our money in wheelbarrows.

I say calm down.

We were once told that the “non-accelerating rate of unemployment” – the level of unemployment needed to stop inflation from rising – was around 4.5%. Right now unemployment is at 3.8% and yet annual inflation actually fell (or “decelerated”) from 4.1% to 3.6%.

That is fantastic news.

The 3.6% means inflation has fallen from the peak of 7.8% at much the same pace it rose to those heights:

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The expectations were for a lower figure, and certainly the 1% March quarter increase is higher than we would get in normal times.

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