Is stagflation set to spring a nasty shock on Britain? – The Times

The last time stagflation gripped the West it sparked an economic revolution. One of the accepted principles of Keynesianism, the orthodoxy since the Second World War, was that high unemployment and rising inflation were mutually exclusive. Yet, in the 1970s, the impossible became real. By the middle of the decade a toxic combination of 9 per cent unemployment in the US and double-digit inflation had set in.

In the battle of ideas that followed, monetarism — Milton Friedman’s free market vision that captured Margaret Thatcher and Ronald Reagan — emerged victorious. The capitalism of John Maynard Keynes, with guardrails and muscular state intervention, was overthrown.

Today, talk of stagflation is back. Bloomberg’s News Trend function, which counts mentions of a topic across multiple sources, shows

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