The Commentariat are spooking themselves themselves with ‘frightmares’ about the “spectre of inflation”. The charge is led by the BBC’s economics team with Hugh Pym warning in his News At 10 report (17th June) that inflation was “haunting the economy….” . Tonight Michael Crick of Newsnight piled on the horror by flashing images of the strikes and inflation that brought down Callaghan’s government……

The Governor of the Bank of England, dismayed by the shock-horror his earlier inflation-hype has caused, has belatedly tried to calm nerves and contradict these irrational fears in his now famous ‘Letter to the Chancellor’ of 16th June. Recanting of his earlier assertions he wrote: “there are good reasons to expect the period of above-target inflation we are experiencing now to be temporary” (my italics). (More about this inflationary squeeze being temporary in my next blog.)
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