Andrew Bailey, the Governor of the Bank of England, admitted last week that “to forecast 10 per cent inflation and to say there isn’t a lot we can do about it is an extremely difficult place to be… This is a bad situation to be in.” It’s the sort of thing that Captain Edward Smith might have argued a little over a century ago had he not gone down with the Titanic. “To spot an iceberg right in front of us and to say there isn’t a lot we can do…”
Bailey suggested that many of the criticisms of the Bank’s recent inflation record were being made only with the benefit of hindsight. How could anyone know, in advance, that Russia would invade Ukraine, that energy prices would soar, that food shortages would develop, or that China would lock down its economy again, thus disrupting global supply chains?
