He is now worried. “Financial markets are going to have to get used to the return of troublesome issues that had, until recently, seemed long dead,” he wrote in May.
Central bankers have not had to deal with an inflation problem during their careers. Having averaged around 10 per cent a year in the 1970s and 1980s, global inflation rates fell to an average close to 5 per cent in the 1990s in the rich-world countries of the OECD, 3 per cent in the 2000s, and 2 per cent in the 2010s.
The question today is whether their view is complacent. Is the world entering another inflationary era?
While many households think the definition of price stability would be an absence of inflation, economists and policymakers favour a gentle annual increase in prices of around 2 per cent.