Inflation down but growth still in doubt

Inflation matters, even though this drop is partly down to year-on-year comparisons no longer taking account of the increase in the rate of VAT in 2011. Oil prices, too, have risen less steeply than before. But any reduction in the rate of increase in the cost of living is welcome. It is only economists who think otherwise, in that inflation reduces the value of the national debt. For ordinary people, it means wages going less far, bills rising much more than salaries, food and fuel taking up a greater share of income, especially for pensioners. If, as the Treasury seems to think, this means inflation may come down to the two per cent target by next year, that is to the good.

By comparison with a fall in inflation, the Moody's credit warning has few practical implications yet. Translated, it means a 30 per cent chance that the UK will lose its AAA credit rating in the next 18 months. If that happened, the cost of borrowing would go up. It would be a blow to the country's standing, too - witness the reaction of France when it was downgraded by Standard & Poor's, another ratings agency. Yet the agencies are fallible, as their dismal record prior to the credit crunch demonstrated.

The Moody's warning does vindicate the Chancellor's strategy in an important respect. One reason for its concerns about the UK economy is its indebtedness: that is precisely what he is seeking to reduce. But the other concern is sluggish economic growth.

And the reality is that while the Government's programme of quantitative easing, or putting money into the economy via the banks, has helped keep interest rates low, it has not produced growth.

Today's inflation figures are lower despite quantitative easing, not because of it. We should be thinking about a change of tack, towards a measure of fiscal easing, by reducing taxation in some forms to stimulate growth. The Government is moving in that direction, but too slowly to make a real difference.

Police under scrutiny

The conviction of the former Metropolitan Police commander, Ali Dizaei, for misconduct in a public office and for perverting the course of justice may not be the end of what has seemed like an interminable affair - his lawyer says he will launch yet another appeal - but it has shown that the police are willing to take seriously claims of corruption among their own. The standing of the police is jeopardised when its most senior officers abuse their power - and when Mr Dizaei's case is finally concluded, the process, however lengthy, may help restore that trust.

This may be how justice works, protracted by appeals, but the cost is huge: well over £1 million. Hearteningly, Mr Dizaei may have to pay back tens of thousands of pounds in legal aid. Justice must be done, but in the case of individuals with means, not at taxpayers' expense.

Fashion philanthropy

The fashion house Burberry is to fund 25 places for design students at the Royal College of Art. It's a philanthropic gesture, but it makes excellent commercial sense too: who knows how many future Gallianos and McQueens await discovery?