Has the time come to slow the monetary tightening or even reverse it? That the answer to these questions is “yes” is becoming an increasingly common view. Markets are certainly behaving as if the days of tightening were numbered. They might even be right. But, crucially, they will only be right on the future of monetary policy if economies turn out to be weak. The stronger economies are, the greater the worry of central banks that inflation will not return to a stable 2 per cent and so the longer policy is likely to stay tight. In essence, then, one can hope that economies will be strong, policy will ease and inflation will vanish, all at the same time. But this best of all possible worlds is far from the most likely one.

The World Economic Outlook Update from the IMF does confirm a somewhat more optimistic view of the economic future. Notably, global economic growth is forecast at 3.2 per cent between the fourth quarters of 2022 and 2023, up from 1.9 per cent between the corresponding quarters in 2021 and 2022. This would be below the 2000-19 average of 3.8 per cent. Yet, given the huge shocks and surges in inflation, this would be a good outcome.

True, growth is forecast at only 1.1 per cent in the high-income countries over the same period, with 1 per cent in the US and just 0.5 per cent in the eurozone. But the UK’s economy is the only one in the G7 forecast to shrink over this period, by 0.5 per cent. The UK forecast for 2023 has also been downgraded by 0.9 percentage points. Consider this one of those “Brexit dividends”. Brexit is the gift that keeps on giving.