MPC member Swati Dhingra spoke recently of her view that although inflation still needs to be taken seriously by the Bank of England, it is not yet at the stage when a prices/wages spiral has begun.

Several sectors are threatening industrial action, but even their demands are for wage increases that are close to but not in excess of the rate of inflation.

In his Autumn statement, the Chancellor, Jeremy Hunt, confirmed that the triple lock on state pensions and certain means tested benefits would increase in line with the rate of inflation. The indicator used to measure the increase is headline CPI from September.

If inflation has begun to fall by April, when the increase takes place, it will inevitably add to the overall rate of inflation.

Dhingra is the newest member of the MPC, having joined in September. She certainly has a different attitude to monetary policy to the member she replaced. Michael Saunders was a confirmed hawk, often voting for interest rate increases in excess of the rate that was eventually agreed.

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