Inflation in most of the Western world is now at levels not seen since the early 1980s. This is despite central banks having a primary, if not sole, objective to ensure price stability. As a result, central banks are failing in their primary objective.

The problem central banks feared for much of the past decade was deflation – the risk of declining prices – rather than inflation. As a result, officials have deployed a lot of analytical firepower and effort to avoid deflation. Central bankers