He’s not exactly a household name. If the average Briton has heard of Andrew Bailey, it’s probably only because he’s the guy who told them not to ask for a pay rise. “Alright for him to say,” said everyone, and went back to phone scrolling.

Still, with inflation now at a thirty-year high of 7 per cent, we are learning the hard way why the Governor of the Bank of England made this cack-handed request. Thanks to decisions made early on in the pandemic and still not unwound, we are entering the era of inflation and oil shocks with an economy dangerously exposed. If the Bank doesn’t unwind its mistakes now, and quickly, Mr Bailey will have to do more than beg us not to be greedy. He and his colleagues will have to generate a deep and painful recession to clean up their own mess.

It began in March 2020, under the tenure of Mr Bailey’s predecessor, the thin-skinned, glory-seeking Mark Carney. With the country heading towards lockdown just as the curtain was coming down on his tenure, the then-governor wasn’t going to miss his last chance to save the world.

So, days before stepping down, he convened a press conference alongside his successor to announce extraordinary measures to help the economy get through “the temporary disruption” of Covid. The Bank slashed interest rates and announced it would buy up billions in government and corporate debt to avoid panic and limit the cost of borrowing. Instead of simply stating it would do what was necessary to protect the gilt market, which was very likely all that was needed, Mr Carney and team charged into action.

What’s odd is that the measures that were introduced appeared to pump up demand and unleash credit just at the moment when the economy was being forced to shut down, so that businesses could not service this demand in the normal way. And despite being meant to address a “temporary” problem, they had no expiration date built in. The Bank was applying a 2008-style crisis response to a completely different crisis.

Even more peculiar was the lack of coordination with fiscal policy. Mr Carney claimed that he was acting “in concert with Her Majesty’s Treasury”. And yet, as the Government’s emergency Covid spending swelled from just £12 billion to a whopping £400 billion, Bank policy responded not by pausing or dialling back, as you would expect. No, under Mr Bailey, the money printing went into overdrive – more and more and more with each Covid wave, until the Bank had created £895 billion, more than double the amount printed in 2008. What strange spell kept Mr Bailey in thrall to this topsy-turvy money mania, we will never know. The result was that the economy received a gargantuan, double steroid injection from both the fiscal and monetary syringes at the same time.

The cost of borrowing plunged into negative territory. With shops and restaurants closed, furlough payments and business grants began to create vast piles of cash in household bank accounts. At first, terrified by the pandemic, people sat on the cash. Then, as panic receded, they – we – began to spend.

What did we buy? Anything you can think of – rugs, sofas, garden chairs, barbecues, bicycles, cars, casual clothes, televisions, computers, food, books… A voracious, unconfined shopping spree was unleashed across the world as governments and central banks everywhere opened the floodgates. No wonder, after a year or so, we saw those extraordinary queues of container ships outside ports, which simply didn’t have enough space, lorries or lorry drivers to unload all this junk. By this point, of course, Mr Carney had moved on to do climate something-or-other at the UN’s special department for would-be celebrity has-beens. No doubt his first act was to set up a taskforce on how to get us all to produce and waste less stuff.

Then, two things happened that were outside the control of any central bank or economist. First, a huge number of people quit their jobs or, in the case of immigrant workers, went home. This wasn’t just a Brexit effect – it happened in the US too – and whether it was a demographic or a lockdown effect is not entirely clear. Either way, the labour force shrank.

Second, Russia invaded Ukraine and the West responded with the most far-reaching sanctions ever tried in a globalised economy, cutting off the largest flow of raw materials and foodstuffs in the world. The ensuing surge in prices, felt so far mainly in our energy and petrol bills, has only just begun. And thanks to policymakers, the UK (and US) have entered this mega-inflationary era with our economies already pumped up to bursting.

Mr Bailey and co have begun to make concerned sounds, but they still haven’t fundamentally questioned the wisdom of paying investors to borrow and spend at a time when unemployment is at all-time lows. The Bank declares plaintively that it cannot possibly control the prices of raw materials on world markets, which is true. And Mr Bailey and others talk about how inflation is only a “transitory” problem, by which they mean that it’s not their fault, since they actually have no way of knowing if the situation is temporary or not. They therefore suggest the Bank oughtn’t to try and do too much about this, lest the cure be worse than the disease.

Well, up to a point. Here’s where we come back to wages. The worst nightmare for a central bank is that real people start to expect inflation to stick around. As a result, they ask for wage rises to cover rising costs. In turn, wage rises mean people have more money to spend, so they bid up the cost of scarce goods even further, exacerbating inflation, which in turn puts pressure on workers to ask for more wage rises and so on – the dreaded “wage-price spiral”.

It is easy to see that an economy already operating at or beyond capacity, with an existing labour shortage and an overhang of excessively loose monetary policy, must be particularly susceptible to this disease. It is a disease that, like many, harms the poorest the most. And the only way to break the cycle is for the Bank to cause a deliberate recession.

We are running out of time to avoid this choice. No, the Bank cannot stop gas prices rising, but it can undo the vast, largely unnecessary stimulus unleashed in 2020. It can remove the lethal vulnerability to inflation currently built into the UK economy – and it had better do it soon, before things really get out of control. Otherwise, as one economist put it, people might start to ask nasty questions, like: “Do these people know what they’re doing?” Luckily, wherever he is, whatever he has left behind, Mr Carney always knows exactly what he’s doing: he’s saving the world.