Faisal Islam: Inflation and borrowing figures illustrate chancellor's Budget challenge
The economic figures released on Wednesday show the constraints for John Healey as he puts the finishing touches to his Budget.
Faisal Islam: Inflation and borrowing figures highlight chancellor's Budget challenge
The Chancellor took an early flight to North East Scotland on Wednesday to unveil new North Sea energy approvals as the latest major economic figures were released.
Seen from 35,000 feet and up close, the inflation and public finance numbers laid out the Budget balancing act in stark terms.
Official figures show the National Debt has passed £3 trillion for the first time.
The headline inflation rate has reached 3.5% and is almost certainly on course to rise back to 4% in the months ahead.
Borrowing is also running above forecasts, as spending and interest costs climb.
Together, these figures show the limits facing John Healey as he finalises his statement for next week.
On the one hand, he says he wants to give consumers "breathing space" as they once again feel the strain of cost of living pressures.
On the other, the public finances are still under pressure from the twin hit of rising inflation and borrowing costs.
Inflation was expected to rise as petrol and diesel prices jumped, in some cases to record levels, but other measures of underlying inflation also moved higher.
From airfares to computer game download prices, there are early signs of stickier price pressures and of higher inflation becoming more entrenched, suggesting the recent rises are not just temporary. Capital Economics now expects the main inflation measure to peak at 4.2% next year.
The Bank of England closely monitors services inflation and core inflation, and this significantly increases the chances of an interest rate rise next month.
The services sector, which covers everything from law and banking to retail, hospitality and tourism, accounts for the vast majority of UK economic output.
The latest inflation reading also feeds into the uprating of tens of billions of pounds in welfare payments next April.
By law, benefits including personal independence payment (PIP) and carer's allowance must rise in line with September's consumer price index (CPI) inflation figure.
The number also confirms that the Triple Lock will lift the State Pension by 3.9% next April.
There is one area of relief: food price inflation has remained largely untouched by the energy shock.
Although higher inflation, combined with frozen tax thresholds, will raise more tax in cash terms, it will also push up the cost of public services, including likely union pay demands.
At the same time, UK borrowing costs have risen in line with most advanced economies as the US-Israel war against Iran has intensified.
The Jackdaw gas field decision is viewed as the beginning of a series of "pro growth" announcements before the Budget.
It sends a clear signal of direction, but it will not fundamentally alter the trade-off between giving households breathing space and delivering a Budget that reassures markets and investors.
The fact that the borrowing-cost gap has narrowed somewhat with other G7 countries, and that the IMF praised the pencilled-in plans to reduce borrowing, gave the chancellor a platform for his Budget.
The latest economic figures show just how difficult it will be to actually deliver those plans.