Best of the financial columnists
Old inflation models are newly fitting
Jeremy Warner
The Daily Telegraph
For much of the post-war period, the “Phillips curve” was the “lodestar of interest-rate setters everywhere”, says Jeremy Warner. It held that “the lower the rate of unemployment, the higher the likely rate of inflation, and vice versa”. But then came globalisation and the mass movement of goods and people. After 2004, EU migrants flocked to Britain; labour supply was no longer fixed and the Phillips curve flattened, making itself “all but irrelevant to
