In spite of a continuing cost of living crisis, rising interest rates and industrial action across the public sector, Andrew Bailey the Governor of the Bank of England is optimistic that the contraction in the economy, which may have already started, will not be the devastating recession that he feared when he gave his last update on the economy last Autumn.

Although economic forecasts are based on more than gut feelings, and Bailey doesn't command the level of respect in the markets commanded by some of his predecessors, he is confident that inflation which remains at the root of the country’s issues and is still in double figures despite a tightening of monetary policy which has lasted over a year, is about fall rapidly.

Scarcity of workers brought about by Brexit and the unwillingness of workers to do the same jobs for the same money following the Pandemic as well as pent-up consumer demand meant that prices rose at a rate not seen in a generation.

Throw into the mix an energy crisis and the war in Ukraine and you have all the ingredients for a rapid decline in the economy.

One of the reasons for Baileys optimism is the fact that significantly lower energy prices, have fed through into official day yet, will lead to lower inflation.

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