Inflation falling back to 2%, the magic number as far as the Bank of England and the increasingly desperate Conservative election campaign are concerned, is unequivocally welcome news.

It has been a long road down from the peak of 11.1% in October 2022 and a great deal of hardship has been felt along the way.

The return to earth poses questions for the Bank of England, the government, both current and future and, most importantly, in the real world, where households are desperate for relief from relentless cost pressures.

The most immediate issue is for the Bank, whose Monetary Policy Committee meets today to ponder a decision on interest rates that will be communicated at midday on Thursday.

Even with the consumer prices index (CPI) rate normalising, no one expects a cut from the current 5.25%.

While the headline rate has been reined in, primarily by food prices rising more slowly than a year ago, inflation for all services remains at 5.7%.

This is precisely the sort of “sticky” above-target domestic inflation the Bank has always feared would linger after energy price shocks fell away, and the reason it forecasts the rate will actually rise in the second half of the year.

Analysts believe that, far from hastening a cut at the next meeting in August, this may push the likelihood back to September, prolonging the discomfort for homeowners coming off fixed rates and those trying to buy or move.

There may also be an electoral factor, with the Bank reluctant to do anything that might play into a febrile environment in which the government claims full credit for falling inflation while the Opposition points to the damage left in its wake.

Having been accused of moving too slowly to increase rates, Governor Andrew Bailey is in no danger of being charged with moving too fast to bring them down.

For Rishi Sunak and his faltering campaign, the news is a fillip entering the final fortnight before polling day. He will claim the credit for the one pledge that has unarguably been met.

Given the influence of external factors, primarily the war in Ukraine, and role of the central bank whose job it is to keep rates in check, how much he can claim for not pursuing policies that would have made it worse is moot.

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For Sir Keir Starmer and Rachel Reeves, hoping to become the next prime minister and chancellor in 16 days, there is good news too, though they won’t let it show for now. They may be moving into Downing Street at the turning of the economic tide.

Given their reliance on growth to make manifesto pledges even remotely add up with required public spending they will be praying that is the case.

And what of the real world? Away from Westminster and Threadneedle Street, no statistic, even one as important as inflation, will bring overnight relief.

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Real prices for food, energy, clothing and rents are all around 20% higher than they were three years ago and for some mortgage repayments have doubled. That has been deeply corrosive for household incomes, increased Britain’s already troubling inequality, and taken a toll on the health and wellbeing of the people the economy relies on to get back to work.

For the first time British households are poorer in real terms at the end of a Parliament than they were at the start in 2019.

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