Even so, there has been some back-tracking. Trade unions are becoming more hard line, the government is raising business costs – not least through increases in the minimum wage and the drive to net zero – and globalisation seems to have peaked.

Moreover, it is beginning to look as though the economy is once again running close to capacity limits. And the fuel is there to drive an inflationary upsurge thanks to large increases in the money supply caused by heavy government borrowing financed by the Bank of England.

It is often said that generals are always trying to refight the last war. Similarly, central bankers try to avert a repeat of the last economic and financial crisis. The experience of today’s central bankers gives them a different mindset from the generation which had to confront the surging inflation of the 1970s that continued into the 1980s.

Instead there are similarities with the attitudes that prevailed in the 1950s and ’60s, where – outside Germany at least – the dominant economic threat that policy-makers thought they had to defend against was deficient demand leading to high unemployment. This made them complacent about inflation.

That changed with the inflationary upsurge of the 1970s. Central bankers, with politicians behind them, were then forced into adopting tough anti-inflationary policies. Eventually, and painfully, these succeeded. There was simultaneously a profound and largely unrecognised change in economic structures.

A new era had begun. But central bankers were slow to acknowledge what in 1996 I colourfully termed “The Death of Inflation”. That was a bold call. It was essentially right for about a quarter of a century. But I think that era has now ended.

The dominant experience for today’s generation of central bankers and politicians is recently very low inflation, threatening to drop into deflation. Moreover, today’s much higher private sector debt makes the system distinctly fragile. And we have recent experience of acute financial instability, namely the global financial crisis of 2008/9. 

By contrast, when inflation started to rise at the beginning of the 1970s, although we had faced plenty of macro difficulties and problems with the pound, in Britain there had been no major financial crisis since the 1930s.

In economics it is always dangerous to express confidence, but I doubt that we will return to anything like the high inflation of the 1970s, never mind the earlier experience of hyper-inflation that still worries many people in Germany. 

Nevertheless, the current consensus among central bankers that inflation is going to peak at relatively low levels and subsequently easily subside strikes me as complacent. They need to relearn the lessons of history.

Roger Bootle is chairman of Capital Economics

roger.bootle@capitaleconomics.com