Inflation has fallen but Rachel Reeves has a brilliant plan to drive it back up

And about time too. We’re all in danger of overdosing on economic doom and gloom.

Growth figures are the worst. After rising 1.1% in the first half of the year, GDP flatlined in the three months to September 30.

Which precisely coincides with the first few months of the new Labour government.

GDP fell in October and November, too. We’re still bracing ourselves for December’s figures.

Government borrowing costs have rocketed to their highest level since the financial crisis in 2008.

Earlier this week, yields on 10-year gilt yields hit 4.9%. This adds another £10billion a year to our annual borrowing costs, stretching Labour Chancellor Rachel Reeves’s “iron-clad” fiscal rules to breaking point.

After today’s inflation figure, they eased to just 4.69%.

Which is good news because it means she’ll be a little less likely to inflict more tax hikes or spending cuts on us.

So let’s celebrate.

Only not too much because there’s a problem. And as ever these days, Rachel Reeves is at the heart of it.

Inflation may have dipped in December, but it’s expected to start climbing again in 2025.

Pantheon Macroeconomics said inflation will jump to 2.8% in January. By April, inflation will be up to 3.2%.

When that happens, today’s dip will be a distant memory.

Other countries are seeing inflation climb too. But Reeves has made ours worse.

Her Budget will be inflationary as employers pass on that national insurance hike to customers in the shape of higher prices.

Slapping VAT on private school fees will also drive up inflation. As will Reeves’ decision to increase the national minimum wage by an inflation-busting 6.7%, or by 16% for 18-to-20 year olds.

The inflation-busting public sector pay hike she pushed through straight after the election will add to the upwards pressure.

Reeves is also going to spend £70billion from April, adding fuel to the fire.

So enjoy today’s good news while it lasts.

As Reeves and PM Keir Starmer keep telling us, they have a Plan for Change. So far, any change has been for the worse.

And it’s not going to get any better. Labour’s plan – such as it is – is going to drive inflation back up just when we thought it was over.

US president-elect Donald Trump is making the situation worse, as his planned tax hikes and trade tariffs will also fuel higher prices.

But Reeves has left us more exposed than any other major country, through her tax and spend splurge.

Inflation is down today but give it time. It’ll be climbing again once Labour’s Plan for Change gets to work. And then we’ll all feel the heat.