We still have an inflation problem

The drop in overall inflation to 4% is welcome, but it masks we still have a real problem.

This shows the annual inflation rate for both tradable and non-tradable inflation. Most of the tradable sector is international, so we have benefited from the trend there. But non-tradable (generally domestic) inflation remains very high at 5.8% and has barely come down from its peak.

I would not be counting on interest rate reductions too soon.