I'm not sure why but Tuesday's announcement that CPI inflation had fallen to 4% shocked economists and city forecasters.

Surely they know by now that what is actually happening in the economy is generally the polar opposite of what they believe is happening?

Joking aside, Tuesday's announcement has clear ramifications for the property market in the sense that an interest rate rise as early as May is now less likely.

After all, if inflation is already falling back of its own accord then there is no need to raise Bank Rate to dampen it further. Hence homeowners can breathe a sigh of relief as it may be a little longer before their mortgage payments rise.

Unfortunately, this argument is rather flawed. We seem to forget that inflation is still double the Bank's 2% target and so remains very much on its radar. The bank needs to bring it back to that target if it is to regain any of the credibility it has lost in recent years.

Also, in just over two weeks' time we will know how the economy fared during Q1, as the ONS is releasing its preliminary growth estimate for that period. If the economy has bounced back from the 'shock' 0.5% decline in the fourth quarter of last year, then the case for rate rises will once again be firmly on the table, possibly as early as June.

At the same time, while inflation has fallen back, primarily due to supermarkets taking a machete to prices, external factors are still weighing heavy. Imported inflation from rising oil, gas and commodity prices remains a real threat and will continue to  exert upward pressure. 5% inflation is by no means off the cards and could arrive as early as the summer.

Of course, even if inflation does flare up again - and many believe it will - there is still the small fact that the consumer is in a state of disarray. Confidence has never been lower, as witnessed by the BRC's latest retail sales data, unemployment is still rising and the future, for many, feels bleak.

And this is the ultimate irony of monetary policy, which aspires to be determined by hard economic fact but which in reality may be determined by how people feel.