It’s not just liquidity which is so strong, of course. So are nominal and real wages. Nominal GDP is growing quickly enough, especially given that the GDP deflator used is very different to the CPI measure of inflation. Given all of this, it makes no sense to be considering loosening monetary policy. The fact that the CPI is actually falling by 0.1pc, implying deflation on that measure, merely tells us that there is something very wrong with our monetary policy’s stated aim. We should stop targeting the CPI, ditch the 2pc target and concentrate instead on another measure: a variant of nominal GDP, perhaps.