Sean O'Grady: Unalloyed good news for us and for the Chancellor

For a long time now, no advance "insider" knowledge has been necessary to guess what was happening to British inflation; it would usually be a lot higher than anyone expected, higher than in Europe, higher than the month before, and way above where the Bank of England thought it would be, or indeed where it should be, that is to say the official 2 per cent target. So 4 per cent inflation, although double the target, is unalloyed good news and especially welcome for the 10 million households with mortgages, as it means the chances of rates being hiked next month is close to zero.

But it is even more fortunate for George Osborne's occupancy of No 11. This is a man for whom things seem to be going far better than he had any right to expect. The Bank of England is basically his "Plan B", there to keep the economy going with low rates while he goes about slashing borrowing. The inflation number makes it much easier for the Bank to keep its side of this tacit bargain. Today also sees the publication of trade data showing a marked improvement, overdue evidence of the "rebalancing" of the British economy back towards the serious business of selling things the rest of the world wants to buy.

This week too, has seen further generous endorsements of the Government from the IMF. Things could easily go horribly wrong: inflation will go up again before the end of the year as world commodity prices feed through; growth will remain pitifully weak; and youth unemployment will be a scar on the economy and the conscience of the nation. Yet, as the Coalition approaches its first anniversary, the economic implosion many predicted has not come to pass.