Perils of inflation

SIR – Jeremy Warner (Business, May 30) so often gets it right, but I take issue with his argument in favour of wage growth and consequent inflation.

We are in a unique situation. The population has been released to go shopping just as supply chains are affected by Covid and Brexit, as well as the Taiwan chip shortage and the aftermath of the Suez blockage. Couple this with an American president on a spending spree, and inflation could easily get out of control.

Remember 1975: inflation at 24 per cent, mitigated in my case by a 27 per cent NHS pay rise (I still have the payslips), which of course only made things worse. Much blame was put on the oil price rise, but it was probable that Richard Nixon’s disastrous Keynesian fiscal policies had the greater effect.

By all means let inflation drift up a couple of per cent, but the Bank of England must have its foot ready on the brake pedal.

Dr Michael Pegg

Esher, Surrey