The UK inflation genie is out of the bottle

A couple of weeks ago, though, new figures showed that CPI inflation was 3.3pc higher in November than the same month the year before. Inflation has now been above the Bank of England's 2pc target for 40 of the past 49 months.

Some of us have been warning this would happen. Since late 2008, this column has asserted that the UK faces inflationary dangers and that talk of British "deflation" was deeply disingenuous, an intellectual conceit to justify massive virtual "money printing" and the extension of endless soft credits to banks that should, in fact, be allowed to fail.

Such a position has been seen as heresy – not least because "quantitative easing" has friends in high places. QE, for now, has helped politically connected bankers to dodge the implications of their own hubris and incompetence. It has allowed successive British governments to stick their fingers in their ears and avoid tackling root-and-branch banking reform.