WARTIME EMERGENcies excepted, Britain’s inflation rate first became an acute problem in the 1960s. The initial policy reaction accorded with the wider enthusiasm at that time for state planning and interference. The government negotiated limits to the maximum increases in wages and prices with the peak organisations of labour and industry, the Trades Union Congress and the Confederation of British Industry.
However, experience showed these “prices and incomes policies” — administered by lawyers, civil servants and the like — could be evaded. Businessmen and workers found ways