For years central banks undershot inflation targets, due in large part to the China globalisation supply shock. Governments didn’t complain and enjoyed low borrowing costs.
With the opposite problem of inflation, politicians are now calling for a review of central bank inflation-targeting frameworks. British Prime Minister Liz Truss is insisting on a review of the Bank of England, and Treasurer Jim Chalmers has already ordered one here.
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Adrian Blundell-Wignall writes on the world economy and is a former director of the OECD. He is currently in Paris.
