I'll begin off with the nice news. Last October, the buyer costs index peaked at a staggering 11.1 p.c. This morning, we realized that it had fallen to six.8 p.c within the 12 months to July. That’s a pointy whole drop and greater than a full share drop from June’s 7.9 p.c.

It’s not adequate, although. Nowhere close to.

July's plunge was largely right down to falling fuel and electrical energy costs, after final 12 months's big spike dropped out of the annual figures. The decrease power worth cap, which got here into drive on July 1, helped right here.

The different main inflation driver, meals payments, truly elevated by 14.8 p.c within the 12 months to July. That's down from 17.3 p.c in June however nonetheless horrendous.

Worse, the autumn out from the Ukraine warfare, with Russia threatening grain exports, may maintain wholesale costs excessive. As may this summer time’s excessive climate.

Core inflation, which strips out risky objects similar to power, meals, booze and fags, held agency at 6.9 p.c.

I see little to rejoice right here.

Especially since this month-to-month drop could also be the perfect we see for a while.

We cannot even escape the distress by taking an affordable flight abroad. Airline fares are rising together with virtually the whole lot else.

The Bank of England will be the world's worst forecaster but it surely’s rate-setting Monetary Policy Committee (MPC) might be proper when it warns that future rate of interest falls will likely be “incremental" rather than substantial.

So this is something of a false dawn.

There is bad news for mortgage borrowers as the MPC is almost certain to hike base rates yet again to 5.5 percent at its next meeting on September 21.

Base rates could peak at six percent which would drive borrowing costs even higher.

Lenders have been cutting mortgage rates in recent days. Unfortunately, that trend may soon come to an end so borrowers nearing the end of a low-cost fixed rate should grab a good remortgage deal today if they can.

At least today's inflation figure is good news for savers. While I don't expect interest rates on best buy fixed rate bonds to rise much, easy access accounts will pay more.

Yet with the very best fixed-rate bond paying 6.1 percent savers will still be getting less than inflation.

If I had cash to spare I’d be sorely tempted to lock into a five-year fixed-rate bond today, with RCI Bank paying up to 5.80 per cent.

Within two or three months, that could be an inflation-busting rate of return. There is no guarantee, though, these things are impossible to predict.

The FTSE 100 has fallen today, as investors fear higher interest rates will squeeze profits, while investors can get five percent yields on gilts with less risk.

This is bad news for pensioners to have left their retirement savings in drawdown, as their value will shrink. As will the value of our stocks and shares Isas, with the US market now falling too.

READ MORE: Core inflation remains high as Britons will still feel pinch despite CPI plunge

So far, the UK economy has shown astonishing resilience and avoided the brutal recession that the BoE predicted last year, which it claimed would last for longer than a year. That’s just one of many predictions the BoE has got horribly wrong. 

Yet BoE governor Andrew Bailey will now pull out all the stops to make sure we do get a recession. He sees this as the only way of beating inflation: by destroying businesses, jobs, incomes and living standards.

Our economy desperately needs growth but instead policymakers have launched a scorched earth policy, when many including me reckon it won’t have much effect on inflation anyway.

Today, we’re worrying about inflation. I suspect it won't be long before we're worrying about a recession, too.

Naturally, the government would like us to see things differently. Chancellor Jeremy Hunt rushed out a press release this morning doing his bit to claim the glory for today's dip saying: “The decisive action we’ve taken to tackle inflation is working, and the rate now stands at its lowest level since February last year.”

I've two issues with this.

First, there isn’t a lot glory to assert. Second, falling inflation has received nothing to do with "decisive motion” taken by HM Treasury.

It’s largely out of Hunt’s fingers however as I’ve written earlier than, he’ll desperately try to claim the credit for it anyway.

Worse, Hunt has made the cost-of-living disaster much more painful by climbing taxes and freezing thresholds, making everyone really feel poorer.

Today introduced a bit of fine news. We'll want much more of it earlier than issues actually begin to get higher.