The hope was that inflation was making a return, and a cheap pound would give UK exports a boost. The markets went out and bought on such hope. But was it a forlorn hope?

Inflation has been creeping up, right? In the UK, it has risen from minus 0.1 per cent in the autumn of 2015 to 2.3 per cent in February of this year. Economists expect UK inflation to pass three per cent later this year.

Meanwhile, stock markets across the world have been hitting new highs: the Dow Jones is up around a quarter in the last three years, the FTSE 100 has not done so well, but it is up by around nine per cent over the same time period.

Ever since the EU referendum and US election, stocks in the UK and US have been soaring.

At the same time, the Fed has been dropping big hints about the need to increase interest rates, and even move close to reversing its quantitative easing programme, by not replacing the bonds it bought under the programme as they mature.

And economists have been assuming that the UK and Eurozone will follow; that it is only a matter of time before interest rates start to rise closer to home.

Collectively, it has been referred to as reflation.

But this consensus has been shaken.

Indeed, the former chair of the Fed, Ben Bernanke recently stirred the consensus by arguing that interest rates may stay at low levels forever.

Turning to the euro area, inflation fell sharply in March, dropping from two per cent in February to just 1.5 per cent. One months’ worth of data does not provide proof, but the trend seems to have reversed.

As for the UK, there were two reasons to expect inflation to rise. Reason number one: it is rising in the US and eurozone and these things tend to work in tandem. Reason number two: the fall in sterling, seen after the EU referendum.

The latest data showing falling euro inflation seems to contradict reason number one.

And since Theresa May announced the UK election, the pound has been rising sharply. It is now close to 1.20 euros, and has risen by more than two cents against the dollar.

In short, the two factors that were driving UK inflation seem to have, at the very minimum, ebbed.

The markets seem to agree with such a prognosis, with the yield on ten-year government bonds falling from 1.24 per cent in March to within a whisker of one per cent.

As for stocks, the FTSE 100 has fallen back too, although this was partly for technical reasons – the index is inversely correlated with sterling, as many of its members enjoy a high proportion of earnings in dollars.

But the US markets have fallen too, the Dow, for example is down three per cent in the last few weeks.

There is no disaster in the making, at least the data does not suggest this. But there is much less reason to continue to expect reflation.