It could be that the economy is running at a hotter rate, relative to its capacity, than the chancellor thinks.

ECONOMIST: The fiscal arithmetic

The right-hand chart, from the World Bank's latest China Quarterly Update, shows GDP growth relative to its estimated potential growth rate if the economy operated at full capacity.

ECONOMIST: Economics focus

For the government, judging the relative importance of sterling, domestic demand, and how close the economy is to capacity, will be unusually tricky.

ECONOMIST: The economy

The relative scarcity of some element of the economy such as labor, manufacturing capacity or a vital commodity can trigger inflation without the economy being especially strong.

FORBES: Stagflation with a twist