A tale of two zones
Sometimes a picture is worth 1,000 words. Here's what's happened to inflation recently in Britain - and the eurozone.
Attending his first meeting with other European finance ministers today, George Osborne might reflect that inflation is yet another area where the view from the UK is rather different.
I've spoken before about UK inflation and its recent tendency to surprise on the upside. As the latest Bank of England Inflation Report admitted, inflation has been above the 2% target in "all but six of the past 30 months".
It may indeed be almost entirely due to temporary factors, which the Bank would be foolish to respond to. But as Mervyn King noted in his press conference releasing that report, it is not enough that this argument is right - it has to be seen to be right by investors, and by the public at large.
As I said in that earlier post, every percentage point rise in the cash value of our economy makes it a little easier for the government to bring down borrowing as a share of GDP.
Tax revenues go up, even if real growth has not - and fixed spending totals end up looking smaller, both in real terms and relative to the overall economy.
Of course, the reverse is also true. Low inflation is another reason why many eurozone governments have found it so hard to reduce their borrowing and debt.
So, it is a convenient coincidence for the UK that inflation is overshooting, just as government borrowing is at its peak. It is also not entirely unrelated - after all, our fiscal plight is one reason why the pound has fallen so sharply, and why prices of imported goods have gone up.
I know even the use of the word "coincidence" will send some of my regular correspondents rushing to their keyboards, outraged, once again at my naivete. In their view, this all part of the authorities' cunning plan to inflate away the debt.
To be clear: I don't think there is such a plan. Cunning or otherwise.
Mervyn King once again last week said last week that he thought inflation would fall back next year, which would imply that interest rates would stay low for a long time - even as growth starts to pick up.
Apparently, the majority of investors still think that's the most likely outcome. Money market rates didn't rise in response to today's inflation news.
However, it's not nothing that the older, RPI, measure of inflation is now at 5.3% - the highest in nearly 20 years.
Whatever the truth, sooner or later, the risk is that the City will decide that the Bank has gone soft on inflation after all.