| Remember all that money you saved during lockdown — great, wasn't it? Except there could be a sting in the tail. Britain's inflation is particularly sticky because many of us are still sitting on excess savings, according to Bank of England rate-setter Catherine Mann. "If people want to spend, they will, and that gives firms pricing power a lot longer," she explained in refreshingly economic terms, following political storms around so-called excuse-flation and the prospect of tacit price controls. Either way, ongoing cost pressures are making Mann's job "much more challenging," she admitted this afternoon, as the Bank tries to get the consumer prices index down to its 2% target. UK inflation has come in above forecasts for each of the last three months, with the core measure — which excludes energy and food — proving especially stubborn. As well as eating away at your savings, it's making life harder in other ways, such as potentially prolonging Britain's strikes. Aslef bosses continue to insist that train drivers face a 20% real-terms pay cut under the latest offer, justifying this week's walkouts, which will cause disruption until Sunday morning.  Closed platforms during a strike at London Euston on May 31, 2023 Photographer: Hollie Adams/Bloomberg The government says drivers have been offered a base salary of close to £65,000 (or "Sixty. Five. Thousand. Pounds." as Transport Secretary Mark. Harper. Tweeted. Today.) and accuse union bosses of refusing to put a fair deal to a vote. High inflation makes it less likely that either unions or the government will back down. A breakthrough requires goodwill to be reciprocated by the union leaders, one official told my colleague Kitty Donaldson. At the moment there doesn't seem to be any from them, the official said. Buckle down for months of further disruption, not only on the overground rail network but also on the Tube, and in schools and other parts of the public sector. Interest rates could get higher too, of course, as Mann and her Bank colleagues struggle with their remit. The housing market has proven surprisingly resilient to rising borrowing costs so far, but we'll have more evidence in the morning as Nationwide publishes its closely-watched data on house prices, and the Bank itself reveals how many mortgages are getting approved. From gardens to farms, the UK's way of life is inextricably linked to rain write Olivia Rudgard and Irina Angel. By 2050, the UK's Environment Agency expects the gap between available water and what's needed by homes and businesses to reach 4 billion liters per day in England — enough to fill 1,600 Olympic size swimming pools. It risks becoming a cautionary tale of how a developed country can squander its most important resource. Read more here. | 
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