There is an emerging theory that targeting inflation by tightening domestic monetary policy may be becoming less effective as globalisation creates pressures in economies which cannot be cured by dampening demand.

Across the developed world, Central banks have been tightening monetary policy for most of this year, but there has been no noticeable effect on inflation.

The UK is a case in point.

The Bank of England began to hike interest rates last December, but inflation has continued to rise and is predicted to continue to do so, possibly reaching 18% by the end of this year or the beginning of 2023.

There have been factors at play which have worsened rising inflation, the most obvious of which is the war in Ukraine, which has driven the wholesale price of gas to extraordinarily elevated levels.