The current escalation in inflation poses a deep problem for central bankers, who have become accustomed to plaudits, rather than brickbats, over the past quarter of a century. Indeed, such has been their dominance that they have in many parts of the world been ‘the only game in town’ when it comes to domestic reform and political stability.

The re-emergence of inflation also poses a critical set of questions for two systematically important central banks, the US Federal Reserve and the