LABOUR has a “vital chance to start again on the economy” after inflation held at 2 per cent last month, the TUC said today.

General secretary Paul Nowak said the country was desperate for a coherent industrial strategy as he told the new government that “taking the right action now will make a real difference.” 

He said: “It’s good that inflation is back at target. 

“But over recent years, food and energy bills have surged. Rents and mortgages have skyrocketed. And real wages are still worth less than in 2008.  

“Getting our economy back on track after 14 years of Tory chaos will take time. But taking the right action now will make a real difference.” 

Cheaper clothing and surging hotel costs during summer events, including pop star Taylor Swift’s gigs, balanced out inflation levels last month, Office for National Statistics (ONS) data suggested.

Food and drink inflation also came down to 1.5 per cent amid rising costs of package holidays, cinemas, theatres and concerts.

The pound surged to the highest level in a year against the US dollar, rising about 0.45 per cent to $1.3 this morning.

Institute for Public Policy Research (IPPR) economist Dr George Dibb said the Bank of England’s policy stance remains too tight with interest rates being held high for too long.

“The new government wants to boost the economy and to prevent inflationary pressures,” he added.

“Only investments in the clean energy transition can shield us from future inflation shocks in international oil and gas markets.”

Rebecca Florisson, analysis for the Work Foundation, warned there is little time to celebrate as the sustained period of double-digit inflation during 2022 and 2023 means that people are still poorer than they were at the start of the last parliament in 2019.