Paul Johnson

Yes, this hopefully will be

in the first round, a temporary increase in inflation, but it may actually, this temporary effect may well result in a longer term, a more permanent increase in inflation, and that will push them towards increasing interest rates.

So genuinely, I think a hard decision.

I think most of them, like the Aptam at the moment, seems to be they'll stick where they were.

But of course, that's compared with a pre-Iran situation where everyone is expecting to cut them two or three times this year.

Well, I think there are several things going on here.

I mean, I do have sympathy with them, both Reeves and Hunt, because, of course, these are only forecasts and they do get an awful lot of coverage as if it already happened, when, of course, it hasn't already happened.

I think there are two or three things going on here.

One is that if you look at our inflation record over the last 15 years, we are just worse than most other countries.

I mean, our inflation has been about one percentage point a year higher than the G7 average for 15 years.

So, you know, commentators look and think, well, you know, this is a country that's struggled to control inflation.

inflation.

Our interest rates on our, it's not just the forecasters, it's also the markets.

The interest rates, as you know, on our debt are higher than those in almost all other countries.

And that reflects also partly concern about inflation and partly concern about the stability, I suppose, of economic policy.

In this particular instance, we are particularly exposed to international gas and oil prices.

Unlike most other countries, we don't

use coal at all.

We have very little domestic supply.

We've got very little nuclear compared with somewhere like France.