For a long time now, inflation has been regarded as the overriding economic enemy, to be contained at almost any cost. But in an age of explosive public debt, it may come to be seen as more of an ally

Conservative Party politicians have spent much of the past decade deriding the “magic money tree” spending plans of the Labour opposition. Austerity resolve had been crumbling from well before the shock of the Covid-19 pandemic, and was all but abandoned when the party reinvented itself under Boris Johnson. Nonetheless, the pretence of fiscal responsibility was maintained, if only for the purpose of providing some political differentiation beyond that of slavery to Brexit.

All that’s now gone. As luck would have it, a whacking great oak of a magic money tree has been discovered growing in the back garden all along; it’s called the Bank of England. Without it, the country could not have mounted the humungous fiscal response to the pandemic we've seen. Unable to raise the money needed in debt markets, the Government would have had no choice but to let the disease do its worst.

As it is, we are seeing the fiscal costs skyrocket to levels which, even a month ago, would have seemed unimaginable. Tax revenues are plunging and, as the Government’s various income and business support schemes kick in, spending is surging.