Yesterday’s financial news in Israel saw journalists leaping with pain. They had a ton of bad news to throw at their public.

It’s not just that the teachers’ strike is a very large possibility on 1st September (yet again and two months before a general election). It is now very evident that inflation is on the move northwards. It has climbed to over 5%. And to combat this, the Bank of Israel (BoI) raised its base rate to 2% by a massive 0.75 points in one move, a disappointing change not seen for 20 years.

The governor of the BoI appeared on TV last night. With the summer heat raging outside, in his tie and jacket, he calmly explained that things are not as bad as they seemed. Well, he would, wouldn’t he? That’s his job.

But is he correct?

Sure, compared to the UK, where the rate of inflation is double that in the Holy Land, where the food supply chain in trouble due to an oppressive drought and when many are facing the horror of unpaid energy bills, Israelis should stop complaining. (Actually, many believe that to be a biological impossibility!)

Israel has four factors going for it that together are helping to keep their financial miseries under control – at least for now and for most people.

First, the Israeli economy is still growing at an exceptionally healthy rate. The country has seen a 7.4% boost over the past 12 months, much of this led by the return of the tourism sector. Unemployment is still very much a non issue.

Second, an unofficial consumers’ revolt, encouraged by some aggressive TV reporting, has forced many of the local food manufacturers as well as importers to restrain planned price hikes. They have either been reduced or delayed for several months. In fact by then, lower petrol prices may kick in to put off once more some of those planned increases.

Third, if we are talking about the cost of delivery, the government has substantially reduced the tax on petrol by at least 0.5 shekels. To put that in perspective, The price at the pump is now about 6.5 shekels per litre.

And finally, the shekel has remained incredibly resilient against most other currencies. Compared to the dollar, it has recovered its position of the early summer. Against sterling, it is appreciated by about 12% over the past year. This strength is helping to keep down the cost of imported inflation.

As ever in economics, we know what has happened, but it is difficult predict the future. The country has obtained lucrative gas contracts with Europe, as a result of the sanctions imposed on Russia. The battles with Gaza and Lebanon seem to be on hold for now. And with an election scheduled for 1st November, the government has a vested interest to ensure that the voting public remain in their comfort zone of complaining, but not too much.

I could argue that relatively speaking that is not a bad position for an economy to be in these days.