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

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

July’s plunge was principally right down to falling fuel and electrical energy costs, after final 12 months’s large spike dropped out of the annual figures. The decrease vitality 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 per cent within the 12 months to July. That’s down from 17.3 per cent in June however nonetheless horrendous.

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

Core inflation, which strips out risky objects comparable to vitality, meals, booze and fags, held agency at 6.9 per cent.

I see little to rejoice right here.

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

We can’t even escape the distress by taking an affordable flight abroad. Airline fares are rising together with nearly every part else.

The Bank of England often is the world’s worst forecaster nevertheless it’s rate-setting Monetary Policy Committee (MPC) might be proper when it warns that future rate of interest falls will likely be “incremental” fairly than substantial.

So that is one thing of a false daybreak.

There is dangerous news for mortgage debtors because the MPC is sort of sure to hike base charges but once more to five.5 per cent at its subsequent assembly on September 21.

Base charges may peak at six per cent which might drive borrowing prices even greater.

Lenders have been reducing mortgage charges in current days. Unfortunately, that pattern could quickly come to an finish so debtors nearing the tip of a low-cost fastened fee ought to seize an excellent remortgage deal in the present day if they'll.

At least yesterday’s inflation determine is sweet news for savers. While I don’t count on rates of interest on finest purchase fastened fee bonds to rise a lot, quick access accounts pays extra.

Yet with the perfect fixed-rate bond paying 6.1 per cent savers will nonetheless be getting lower than inflation.

If I had money to spare I’d be sorely tempted to lock right into a five-year fixed-rate bond in the present day, with RCI Bank paying as much as 5.80 per cent.

Within two or three months, that may very well be an inflation-busting fee of return. There is not any assure, although, this stuff are unimaginable to foretell.

The FTSE 100 fell yesterday, as traders concern greater rates of interest will squeeze income, whereas traders can get 5 % yields on gilts with much less threat.

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

Harvey Jones is the Personal Finance Editor at Daily Express.