A significant drop in headline inflation is being treated like a major military victory. Let’s keep it in perspective.

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Inflation can go down as well as up, and not just in the US. The response in the UK has been to put out more flags, much as if the country had just won a great military victory. Before going further, we should be clear that the results, showing headline inflation dropped sharply to 7.9% in June from 8.7% the previous month, were indeed better than had been expected and marked the biggest positive surprise on UK inflation in two years. But they’re still worse than in the eurozone, and the fall in core inflation, excluding fuel and food, was only 0.2 percentage points: