“The government has undoubtedly added to, and extended, the inflation problem with its generous public pay settlements and minimum wage increases,” says Paul Dales, chief UK economist at Capital Economics. “Labour has run a higher budget deficit than its predecessor projected and a higher deficit than it projected itself. This doesn’t necessarily mean it has fallen short of its commitment to ‘sound money’, but it may do so if this becomes a habit,” adds Capital Economics’ Dales.