British workers find themselves competing in a global market.Demand-pull hardly exists either for much the same reason. As for wage inflation, that has largely disappeared in the private sector. Not only has there been huge inward migration from lower-waged economies in Eastern Europe, but if wage pressures rise too much, jobs are "outsourced" to places such as India. One of the astounding things over the past year has been the extent to which higher raw material and energy prices have not fed through into prices in the shops. Cost-push was when costs went up, usually because of a rise in commodity prices or wages.

Demand-pull was when demand was so strong that producers could get away with charging more.Those forces still exist, but in much less dramatic form Cost-push hardly exists. We used to think of inflation as being either cost-push or demand-pull, or some mixture of the two. The price of things we have to buy, such as petrol, has been going up, whereas the things we might like to buy, such as flat-screen TVs, has been coming down. Nevertheless, as a general proposition, there is remarkably little inflation around when you consider what has been happening to oil and commodity prices. Further, if Lord Browne, chairman of BP, is right, the oil price could fall to $25 a barrel. So what is the worry?I think the key thing to understand is that inflation now is different from inflation 20 years ago.

It would follow, though he did not make the point explicitly, that the world will face higher interest rates than the markets expect, for increases in rates will be needed to curb this inflation. But hang on, what inflation? On the official figures, there is hardly any. Consumer prices are up 2.2 per cent on the year, which compares with the target of 2 per cent So it is up a bit and it may well go up a bit more. But that target is supposed to be symmetrical and, for much of the past few years, it has been running below target Indeed, the price of the goods in the shops is falling. Insofar as there is current inflation, it is largely in energy (of course), in taxation and in charges for government and other services.This is annoying because we do, to some extent, feel trapped. Shares here are now below the level they were at the beginning of the year. European shares are at a six-month low; US ones about a seven-month low.

Mervyn King's principal concern was that inflation is rising worldwide, not just in the developed world but in China too. On cue, our share prices fall by more than 100 points, while those of the US, Europe and much of the developing world declined substantially too. Just sometimes the financial markets do as they are told. The Governor of the Bank of England gives a speech in which he says that there will be a "bumpier stretch of the road" ahead. It is by sheer chance that Muhammad Abdul Kahar is recovering from his bullet wound, and not dead More from Philip Hensher. If it was baseless, it can hardly be regarded as a matter of security any longer.

If we don't want the police to start bursting through our own innocent doors at 4 am, I think we can start to insist that they will, at some stage, be held accountable for this ugly error of judgement. The very least we can expect, when this sort of thing happens, is to demand that the police explain exactly what the information was. The only thing the police have to say is that the information was credible and specific.And wrong. Their family, friends and community express astonishment that anyone could consider them terrorists, and in a week, the police agree, releasing them without charge. I'm sure in reality she isn't as appalling as Mr Gray makes her sound, but anyone entering this profession for the first time would be wise to prepare themselves.* A family of Bangladeshi origin is woken in the middle of the night by hundreds of police officers In terror, one of them is shot. It's kind of an interesting idea, though one wonders why someone who has written a play doesn't just send it to an agent.