Have we avoided a recession, or just delayed it?
Rarely has good news felt so bad.
Of course it is a huge relief all round that the era of double-digit inflation appears finally to have run its course.
But the bond markets hated what they saw, particularly the rise in core inflation.
The implications of this are fairly profound — and worrying.
The spike in gilt yields suggests that the markets are starting to lose faith in the Bank of England’s monetary strategy. Inflation is simply not bending to the will of the Old Lady of Threadneedle Street as planned.
I wrote in this column over the winter that the peak interest rate might have to start with a five. It felt a bit brave at the time but now it seems impossible to see how that unhappy outcome can be avoided.
As sure as night follows day the mortgage markets will start repricing their fixed-rate products in the coming days in a move that will mean more pain for homeowners and yet more spending power sucked out of the economy. That will inevitably further slow the anaemic growth the economy has been experiencing over most of the past year and possibly bring it to a halt altogether.
The UK has successfully avoided recession in the first half of the year — just — contrary to the gloomy forecasts that were around last autumn.
But is it possible that we have seen recession deferred rather than recession averted? Is it now on the cards that the period of prolonged rising interest rates will after all push the UK into a slump — just six months later than expected? Let’s hope not