This view has been expressed by a group of economists among which the most famous is probably Professor Charles Goodhart writting an open letter published in the FT. The letter stresses the dangers of the M4 monetary aggregate growing at an annual rate over 12 %. As worded in the letter: “… the main causes of the current buoyancy of asset prices and aggregate demand are the high growth rates of money and credit over the past two years.” According to one of the signatories, rates will have to go to 6 % to 6.5 %, and may have to reach 7.5 % as a result of this uncontrolled growth of money.

Putting aside the problems that a spiraling inflationary process could have, the way the British inflationary problem has been dealt with, is a very enriching intellectual exercise. Inflation went up and the Governor wrote a letter to the Chancellor. The Chancellor responded. Them a group of academics with a given bias, replied in the financial press to clarify their worries and the measures they thought should be taken. All of it very intellectually enriching.